System and method for automated trading of financial interests

ABSTRACT

A derived order gives a participant simultaneous access to liquidity across multiple books, destinations, or marketplaces. The derived order can be placed and anchored in one trading venue and simultaneously replicated in another trading venue. A participant can place the derived order in the lit book as an anchor book and replicate the order in the hybrid book and/or the dark book, or alternatively, the participant can place the derived order in the hybrid book as an anchor book and replicate the order in the dark book. A trading engine can be configured to replicate an order in different books and guarantee that each order is only executed once. When an order is replicated, the trading engine can check the stored record to see where the order was placed, and then adjust or cancel an order in one book when it is being fulfilled in a different book.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation of Non-Provisional patent applicationSer. No. 14/744,243, filed Jun. 19, 2015, entitled System and Method forAutomated Trading of Financial Interests, which claims priority to U.S.Provisional Patent Application Ser. No. 61/838,696, filed Jun. 24, 2013,U.S. Provisional Patent Application Ser. No. 61/838,763, filed Jun. 24,2013, U.S. Provisional Patent Application Ser. No. 61/894,608, filedOct. 23, 2013, Canadian Application Serial No. 2,835,860, filed Dec. 9,2013, PCT Application No. PCT/CA2013/001014, filed Dec. 9, 2013, and PCTApplication No. PCT/CA2013/001016, filed Dec. 9, 2013, all of which arehereby incorporated by reference in their entirety.

FIELD

Embodiments described herein relate to systems, methods, and computerreadable instructions for processing data representing and/or otherwiserelated to transactions in financial interests, using automatedelectronic trading systems configured for trading across multiplenetworked venues, including order books, venues, marketplaces,exchanges, alternative trading systems, and/or other markets, and/orvarious types thereof.

BACKGROUND

Aspects of embodiments disclosed herein relate to the trading, holding,transferring, buying, selling, and/or administration of financialinterests. Financial interests may be used herein to refer tosecurities, equity, debt, shares, derivatives, and other types offinancial interests or instruments. Trading may be used herein to referto holding, transferring, buying, selling, and other types of exchange.Aspects of such trading, holding, transferring, buying, selling, and/oradministration may be subject to regulation by governmental and otheragencies. The disclosure herein is made solely in terms of logical,programming, and communications possibilities, without regard tostatutory, regulatory, or other legal considerations. Nothing herein isintended as a statement or representation that any system, method orprocess proposed or discussed herein, or the use thereof, does or doesnot comply with any statute, law, regulation, or other legal requirementin any jurisdiction; nor should it be taken or construed as doing so.

Developments in the semi- and/or fully-automated trading of financialinterests have created disparities between different types andcategories of market participants, and their various needs, expectationsand goals. Market participants may be used herein to refer to traders,dealers, investors, advisors, buyers, sellers, vendors, issuers, andother participants directly or indirectly related to trading offinancial interests across one or more networked venues. Networkedvenues may be used herein to refer to order books, venues, securitiestrading venues, marketplaces, exchanges, alternative trading systems,and/or other markets, and/or various types thereof. There exists a needfor different types of networked venues and/or other platforms for thetrading of financial instruments, both private and public in nature, orat least alternatives.

SUMMARY

Accordingly, in various aspects, embodiments disclosed herein providemarket participants with the ability to access multiple differentnetworked venues (e.g. order books, marketplaces, venues, exchanges,trading venues, alternative trading systems, markets), selectively,simultaneously, synchronously, and/or in other desired fashion(s). Typesof networked venues that may be accessed include, for example, privateequity exchanges, public securities exchanges, various order bookswithin an exchange, such as for example dark (i.e., those in which termsof sought and/or proposed trades are not disclosed to other marketparticipants), lit (i.e., those in which terms of sought and/or proposedtrades are disclosed to other market participants), various forms ofhybrid and other order books. These are illustrative examples ofelectronic networked venues, and variations may be used by embodimentsdescribed herein. For each of these types of networked venues, and forspecific implementations, and for different types of orders (e.g. buy,sell) different trading rules, strategies, and/or other parameters mayapply, depending on factors such as the type(s) of marketparticipant(s), jurisdiction(s), and regulation(s) involved, amongothers.

Order routers, including smart order routers (SORs) such as routerswhich implement latency-normalized and/or otherwise synchronized tradingalgorithms, may be used in providing the market participant(s) withaccess to the networked venues. As noted, networked venues may be usedherein to refer to order books, venues, securities trading venues,marketplaces, exchanges, alternative trading systems, and/or othermarkets, and/or various types thereof.

In various aspects, embodiments may further provide improved methods,systems, and computer readable instructions, for reporting or publishinginformation related to financial interests, trading transactions, andother financial data in order, for example, to facilitate compliancewith regulatory and other reporting procedures, for improved tradingcapabilities, and book keeping, and/or for a wide variety of otherpurposes; and for exchanging data between networked venues, reportingservices and/or other entities. Reporting or publishing may be referredto herein as various activities for increasing visibility of financialinterest data, such as distributing, transmitting, making available, andso on.

In an aspect, embodiments described herein may provide a method forautomated trading of financial interests on electronic trading systems.The method may involve receiving, using a receiver at a transactionorder processor from a plurality of market participant processors,signals defining data sets representing a plurality of proposed orderrequests to execute transactions in one or more financial interests, theplurality of proposed order requests comprising a plurality of proposedbuy order requests and a plurality of proposed sell order requests;storing the plurality of proposed order requests in a persistent datastore; matching, using a matching engine, one or more buy orders of theplurality of buy orders to one or more sell orders of the plurality ofsell orders according to at least three matching factors; executing,using the transaction order processor, transactions based on the one ormore buy orders matched to the one or more sell orders; transmitting,using a transmitter at the transaction order processor to one or more ofthe plurality of market participant processors, signals defining one ormore of the executed transactions.

In accordance with some embodiments, each proposed order request of theplurality of proposed order requests are associated with a plurality ofattributes comprising an order time, an order size, a price level,cancellation attributes, and client dealer attributes. In accordancewith some embodiments, the method may involve at least three matchingfactors comprise: a priority time or a sequence identifier; a last orderevent; and a remaining unexecuted order size.

In accordance with some embodiments, each proposed order request of theplurality of proposed order requests is associated with an attributecomprising a priority time defined by a unique sequence identifier.

In accordance with some embodiments, the sequence identifier is assignedto a proposed order at time of entry when an order size and a pricelevel is defined for an order, wherein the sequence identifier is resetfor the proposed order when the order size changes or the price levelchanges.

In accordance with some embodiments, the last order event is selectedfrom the group consisting of: full fill of the proposed order request,partial fill of the proposed order request, change of order size of theproposed order request, change of price level of the proposed orderrequest.

In accordance with some embodiments, each of the at least three matchingfactors is associated with a non-zero coefficient weighting.

In accordance with some embodiments, the method may involve, prior tothe matching, pre-filtering the plurality of proposed order requestsbased on one or more attributes.

In accordance with some embodiments, the pre-filtering comprisesminimizing a number of trade executions per order.

In accordance with some embodiments, the pre-filtering is based on atleast one of the order size, a user type, and an order type.

In accordance with some embodiments, the method may involve, prior tothe matching, pre-processing the plurality of proposed order requests bysegregating the plurality of proposed order requests into a plurality ofgroups; wherein the matching is performed on a per group basis.

In accordance with some embodiments, the segregating is based on asegregation model selected from the group consisting of price level,order type, order attribute, order size, user type, user attribute, andorder origination.

In accordance with some embodiments, each proposed order request of theplurality of proposed order requests are associated with a plurality ofattributes comprising an order time, wherein the order time is roundedto a predetermined increment.

In accordance with some embodiments, each proposed order request of theplurality of proposed order requests is associated with an attributecomprising a timestamp for an original time of order entry, and asequence identifier.

In another aspect, embodiments described herein may provide a system forautomated trading of financial interests on electronic trading systems.The system may involve a transaction order processor comprising areceiver configured to receive, from a plurality of market participantprocessors, signals defining data sets representing a plurality ofproposed order requests to execute transactions in one or more financialinterests, the plurality of proposed order requests comprising aplurality of proposed buy order requests and a plurality of proposedsell order requests; a persistent data store for storing the pluralityof proposed order requests; a matching engine for matching one or morebuy orders of the plurality of buy orders to one or more sell orders ofthe plurality of sell orders according to at least three matchingfactors to match; and wherein the transaction order processor furthercomprises: electronic trading circuitry configured to interface withnetworked venues to execute transactions based on the one or more buyorders matched to the one or more sell orders; and a transmitterconfigured to transmit signals defining one or more of the executedtransactions to one or more of the plurality of market participantprocessors.

In accordance with some embodiments, the system may involve apre-filterer for pre-filtering the plurality of proposed order requestsprior to the matching by the matching engine.

In accordance with some embodiments, the pre-filterer is configured forpre-filtering by minimizing a number of trade executions per order.

In accordance with some embodiments, the pre-filterer is configured forpre-filtering based on at least one of the order size, a user type, userattribute, an order type, cancellation attributes, and client dealerattributes.

In accordance with some embodiments, the system may involve a segregatorfor segregating the plurality of proposed order requests into aplurality of groups; wherein the matching engine performs the matchingon a per group basis.

In accordance with some embodiments, the segregator is configured forsegregating based on a segregation model selected from the groupconsisting of price level, order type, order attribute, order size, usertype or other user attribute, and order origination.

In a further aspect, embodiments described herein may provide a methodfor automated trading of financial interests on electronic tradingsystems. The method may involve receiving, using a receiver at atransaction order processor from a plurality of market participantprocessors, signals defining data sets representing a plurality ofproposed order requests to execute transactions in one or more financialinterests; storing the plurality of proposed order requests in apersistent data store; generating and storing a segmentation table in apersistent data store, the segmentation table defining acceptanceconditions and rejection conditions; for each proposed order request ofthe plurality of proposed order requests: automatically determining,using a segmentation processor and the segmentation table, whether toapprove or reject the proposed order request; upon determining that theproposed order request is approved, executing, using a transaction orderprocessor, one or more transactions based on the proposed order request,and transmitting, using a transmitter at the transaction orderprocessor, signals defining one or more of the executed transactions toone or more of the plurality of market participant processors; and upondetermining that the proposed order request is rejected, transmittingusing the transmitter at the transaction order processor, a rejectionnotification to a market participant system corresponding to theproposed order request.

In accordance with some embodiments, the plurality of proposed orderrequests comprise a plurality of proposed active order requests and aplurality of proposed passive order requests, and wherein thesegmentation table defines acceptance conditions for active orderrequests and passive order requests and rejection conditions for activeorder requests and passive order requests.

In accordance with some embodiments, each proposed order request of theplurality of proposed order requests comprises a market participantidentifier, and wherein the segmentation table defines acceptanceconditions specific to the market participant identifier and rejectionconditions specific to the market participant identifier.

In accordance with some embodiments, the plurality of proposed orderrequests relate to a plurality of types of electronic trading venues,the plurality of types of electronic trading venues comprising a litbook, a hybrid book, crossing hook, and a dark book, and wherein thesegmentation table defines acceptance conditions specific to types ofelectronic trading venues and rejection conditions specific to types ofelectronic trading venues. A lit book, a hybrid book, a dark book, and acrossing book may refer herein to a trading book, an order hook, ornetworked venue. In accordance with some embodiments, each order requestof the plurality of proposed order requests comprise one or more orderparameters, and wherein the segmentation table defines acceptanceconditions specific to order parameters and rejection conditionsspecific to the order parameters.

In accordance with some embodiments, the order parameters are selectedfrom the group consisting of: market participant identifier, order entrymessage tag, order entry tag value, order type, order attribute, andorder to trade ratio.

In another aspect, embodiments described herein may provide a system forautomated trading of financial interests on electronic tradingcomprising: a transaction order processor comprising a receiver toreceive, from a plurality of market participant processors, signalsdefining data sets representing a plurality of proposed order requeststo execute transactions in one or more financial interests; a persistentdata store configured with control logic to store: the plurality ofproposed order requests; and a segmentation table, the segmentationtable defining acceptance conditions and rejection conditions; asegmentation processor configured with control logic to, for eachproposed order request of the plurality of proposed order requests:automatically determine, using the segmentation table, whether toapprove or reject the proposed order request; upon determining that theproposed order request is approved, executing, instruct the transactionorder processor to process the one or more transactions based on theproposed order request; and upon determining that the proposed orderrequest is rejected, use a transmitter to transmit a rejectionnotification to a market participant system corresponding to theproposed order request.

In accordance with some embodiments, the plurality of proposed orderrequests comprise a plurality of proposed active order requests and aplurality of proposed passive order requests, and wherein thesegmentation table defines acceptance conditions for active orderrequests and passive order requests and rejection conditions for activeorder requests and passive order requests.

In accordance with some embodiments, each proposed order request of theplurality of proposed order requests comprises a market participantidentifier, and wherein the segmentation table defines acceptanceconditions specific to the market participant identifier and rejectionconditions specific to the market participant identifier.

In accordance with some embodiments, the plurality of proposed orderrequests relate to a plurality of types of electronic trading venues,the plurality of types of electronic trading venues comprising a litbook, a hybrid hook, crossing book, and a dark book, and wherein thesegmentation table defines acceptance conditions specific to types ofelectronic trading venues and rejection conditions specific to types ofelectronic trading venues.

In accordance with some embodiments, each order request of the pluralityof proposed order requests comprise one or more order parameters, andwherein the segmentation table defines acceptance conditions specific toorder parameters and rejection conditions specific to the orderparameters.

In accordance with some embodiments, the order parameters are selectedfrom the group consisting of: market participant identifier, order entrymessage tag, order entry tag value, order type, order attribute, usertype, and order to trade ratio.

In another aspect, embodiments described herein may provide a method forautomated trading of financial interests on electronic trading systems.The method may involve generating an electronic hybrid order book;storing and updating the hybrid order book at a persistent store;receiving, using a receiver at a transaction order processor from aplurality of market participant processors, signals defining data setsrepresenting a plurality of proposed order requests to executetransactions in one or more financial interests for submission to thehybrid order book; storing the plurality of proposed order requests inthe persistent data store; storing order conditions for the hybrid orderbook in the persistent data store, wherein the order conditions definewhen proposed order requests are visible and tradable, wherein an ordercondition defines that an order request is visible and tradable based ona reference price for an order request, wherein the order conditiondynamically modifies based on changes to the reference price; for eachproposed order request of the plurality of proposed order requests:applying the order conditions for the hybrid order book to the proposedorder request to determine whether the proposed order request is visibleand tradable; upon determining that the proposed order request isdisplayable and tradable, executing, using the transaction orderprocessor, one or more transactions based on the proposed order request;transmitting using a transmitter at the transaction order processorsignals defining whether the proposed order request is visible andtradable to a portion of the market participant processors, wherein afirst portion of the order requests of the plurality of proposed orderrequests is visible and tradable and wherein a second portion of theorder requests of the plurality of proposed order requests is notvisible and tradable.

In accordance with some embodiments, the plurality of proposed orderrequests may comprise a plurality of buy orders and a plurality of sellorders, wherein each proposed order request of the plurality of proposedorder requests are associated with a plurality of attributes comprisingan order time, an order size, a price level, and wherein the method mayfurther comprise: determining a best hid or offer value, wherein thereference price is based on the best bid or offer value; for eachproposed order request of the plurality of proposed order requests:comparing the price level to the best bid or offer value to determinewhether the proposed order request is visible and tradable; receiving,using the receiver, a revised best bid or offer value using thereceiver; updating the reference price based on the revised best bid oroffer value.

In accordance with some embodiments, the plurality of proposed orderrequests comprise a plurality of buy orders and a plurality of sellorders, wherein each proposed order request of the plurality of proposedorder requests are associated with a plurality of attributes, whereinthe method further comprises: matching, using a matching engine, one ormore buy orders of the plurality of buy orders to one or more sellorders of the plurality of sell orders based on one or more of theplurality of attributes.

In accordance with some embodiments, the matching may be based on aplurality of matching priorities selected from the group consisting of:price, broker preferencing, market maker, and size-time matching.

In accordance with some embodiments, size-time matching is according toat least three matching factors comprising: a priority time or asequence identifier; a last order event; and a remaining unexecutedorder size.

In a further aspect, embodiments described herein may provide a systemfor automated trading of financial interests on electronic tradingsystems comprising: a hybrid order book; a transaction order processorcomprising a receiver to receive, from a plurality of market participantprocessors, signals defining data sets representing a plurality ofproposed order requests to execute transactions in one or more financialinterests for submission to the hybrid order book; a persistent datastore storing the plurality of proposed order requests and orderconditions for the hybrid order book, wherein the order conditionsdefine when proposed order requests are visible and tradable, wherein anorder condition defines that an order request is visible and tradablebased on a reference price for an order request, wherein the ordercondition dynamically modifies based on changes to the reference price;wherein the transaction order processor is further configured to, foreach proposed order request of the plurality of proposed order requests:apply the order conditions for the hybrid order book to the proposedorder request to determine whether the proposed order request is visibleand tradable; upon determining that the proposed order request isdisplayable and tradable, executing, using the transaction orderprocessor, one or more transactions based on the proposed order request;use a transmitter to transmit signals defining whether the proposedorder request is visible and tradable to a portion of the marketparticipant processors; and wherein a first portion of the orderrequests of the plurality of proposed order requests is visible andtradable and wherein a second portion of the order requests of theplurality of proposed order requests is not visible and tradable.

In another aspect, embodiments described herein may provide a method forautomated trading of financial interests on electronic trading systems.The method may involve generating at least two electronic tradingvenues; storing and updating the at least two electronic trading venuesat a persistent store; receiving, using a receiver at a transactionorder processor from a plurality of market participant processors,signals defining data sets representing a proposed order request toexecute transactions in one or more financial interests; storing theproposed order request in the persistent data store; entering theproposed order request in one of the at least two electronic tradingvenues; entering a copy of the proposed order request in the other ofthe at least two electronic trading venues; linking the proposed orderrequest in the one of the at least two electronic trading venues to thecopy of the proposed order request in the other of the at least twoelectronic trading venues; receiving an update to one of the proposedorder request or the copy of the proposed order request; making acorresponding update to the other of the proposed order request or thecopy of the proposed order request using the linking; executing, usingthe transaction order processor, one or more transactions based on theproposed order request or the copy of the proposed order request.

In accordance with some embodiments, the method may involve partiallyexecuting one of the proposed order request or the copy of the proposedorder request such that there is a remaining unexecuted order size; andmaking a corresponding update to the other of the proposed order requestor the copy of the proposed order request using the linking.

In a further aspect, embodiments described herein may provide a systemfor automated trading of financial interests on electronic tradingsystems comprising: at least two electronic trading venues; atransaction order processor comprising a receiver to receive, from aplurality of market participant processors, signals defining data setsrepresenting a proposed order request to execute transactions in one ormore financial interests, and a processor to enter the proposed orderrequest in one of the at least two electronic trading venues and a copyof the proposed order request in the other of the at least twoelectronic trading venues; a persistent data store storing and updatingthe at least two electronic trading venues, the proposed order request,the copy of the proposed order request, and a link between the proposedorder request in the one of the at least two electronic trading venuesto the copy of the proposed order request in the other of the at leasttwo electronic trading venues; wherein the transaction order processoris further configured to: receive an update to one of the proposed orderrequest or the copy of the proposed order request; make a correspondingupdate to the other of the proposed order request or the copy of theproposed order request using the linking; and execute one or moretransactions based on the proposed order request or the copy of theproposed order request.

A derived order gives a participant simultaneous access to liquidityacross multiple books, destinations, or marketplaces. The derived ordercan be placed and anchored in one trading venue and simultaneouslyreplicated in one or more other trading venues. A participant can placethe derived order in the lit book as an anchor hook and replicate theorder in the hybrid book and/or the dark hook, or alternatively, theparticipant can place the derived order in the hybrid hook as an anchorbook and replicate the order in the dark hook. A trading engine can beconfigured to replicate an order in different books and guarantee thateach order is only executed once. When an order is replicated, thetrading engine can check the stored record to sec where the order wasplaced, and then adjust or cancel an order in one book when it is beingfulfilled in a different book.

In one embodiment, a computer-implemented method comprises receiving, bya processor, a message comprising an identification of a financialinstrument to be traded, an amount of the financial instrument to betraded, and two or more venues to place an order for a trade of thefinancial instrument in the amount; simultaneously placing, by theprocessor, an order in a first venue of the two or more venues for thefinancial instrument in the amount and an order in a second venue of thetwo or more venues for the financial instrument in the amount; andexecuting, by the processor, a trade for the order in the first venue orsecond venue; and upon executing the trade, simultaneously updating, bythe processor, the order in other venues of the two or more venues thatthe order was placed based on the amount of the trade for the order inthe first venue.

In one aspect, the first venue or the second venue can be a tradingbook. The first venue can be a lit book. The first venue can be a hybridbook. The first venue can be a lit hook, and the second venue can be ahybrid book or a dark book. The first venue can be a hybrid book, andthe second venue can be a dark book. The order in the first venue can bepublicly displayed and the order in the second venue can be availablebut not publicly displayed. The method may further comprise canceling,by the processor, the order in the second venue when the trade is forthe amount of the order in the first venue. The method may furthercomprise canceling, by the processor, the order in the first venue whenthe trade is for the amount of the order in the second venue. The methodmay further comprise reducing, by the processor, the order in the secondvenue for a trade amount of the trade of the order in the first venue.The method may further comprise reducing, by the processor, the order inthe first venue for a trade amount of the trade of the order in thesecond venue.

In another embodiment, an order system comprises a first trading orderbook processor configured to post orders and trades in a first orderbook; a second trading order book processor configured to post ordersand trades in a second order book; a trading engine processor configuredto: receive a message from a participant for an order to place in thefirst order book and simultaneously replicate the order in the secondorder book; transmit instructions to the first trading order bookprocessor to place, trade, cancel, or adjust an order in the first orderbook; and upon transmitting instructions to the first trading orderbook, simultaneously transmit instructions to the second order bookprocessor to place, trade, cancel, or adjust an order in the secondorder book.

In one aspect, the trading engine processor can be a smart order router.The trading engine processor can be configured to transmit instructionsto the first trading book processor to trade an order in the first orderbook and simultaneously transmit instructions to the second trading hookprocessor to cancel an order in the second order book that wasreplicated from the order in the first order book. The trading engineprocessor can be configured to transmit instructions to the firsttrading book processor to trade an order in the first order book andsimultaneously transmit instructions to the second trading bookprocessor to decrease by an amount of the trade an order in the secondorder book that was replicated from the order in the first order book.The first order book can be a lit order book or a hybrid order book. Thesecond order book can be a hybrid order book or a dark order book. Theorder in the first order book can be publicly displayed and the order inthe second order book can be available but not publicly displayed. Thesystem can further comprise a memory associated with the trading engineprocessor and configured to store a record of orders replicated in thefirst order book or second order book, wherein the trading engineprocessor is configured to store the record when replicating an orderand check the database when executing a full or partial order todetermine where to cancel or adjust another order.

In one embodiment, a computer-implemented method comprises receiving, bya computer, a request from a participant to take liquidity in a venue,wherein the request comprises an identification of the participant;determining, by the computer, whether the participant is a long terminvestor or a short term investor based at least in part upon theidentification of the participant in the request; when the participantis a long term investor, transmitting, by the computer, instructions toa trading engine processor to execute the order; and when theparticipant is a short term investor: holding, by the computer, theorder for a period of time, and after expiration of the period of time,transmitting, by the computer, instructions to the trading engineprocessor to execute the order.

In one aspect, the venue can be a hybrid order book. The request cancomprise a participant identification number. The method can furthercomprise analyzing the request to identify whether the participantself-attested to being a short term investor. The method can furthercomprise analyzing the request to identify whether a pattern ofhistorical orders of the participant are associated with a short terminvestor. The period of time can be a minimum of 5 milliseconds. Theperiod of time can be a maximum of 9 milliseconds. Transmittinginstructions to execute the order after the period of time can furthercomprise determining, by the computer, a random value of the period oftime between a minimum value and a maximum value; and after the randomvalue of the period of time, generating, by the computer, a messagecomprising instructions to execute the order.

In another embodiment, a system comprises a trading engine configured toexecute an order in a trading venue; and an order entry gatewaycommunicatively coupled to the trading engine, wherein the order entrygateway comprises a queue to hold orders to take liquidity that arereceived from short term investors according to a random delay time, andtransmit an order in the queue to the trading engine after expiration ofthe random delay time.

In one aspect, the random delay time can be between a minimum delay timeand a maximum delay time. The queue of the order entry gateway does nothold orders of a long term investor. The trading venue can be a hybridorder book. A database can be configured to store records identifyingwhich participants are short term investors and which participants arelong term investors. The order entry gateway can be configured to accessthe database to determine whether a participant is a short term investorand send a message to the trading engine that the participant is a shortterm investor. The order entry gateway can be configured to access thedatabase to determine whether a participant is a long term investor andsend a message to the trading engine that the participant is a long terminvestor.

In one embodiment, a computer-implemented method comprises receiving, bya computer, a sell order having a first volume; automaticallyallocating, by the computer, a first portion of the first volume of thesell order to a first buy order having a best price; executing, by thecomputer, the first buy order according to the allocation of the firstportion; automatically allocating, by the computer, a second portion ofa first remaining volume of the sell order to a second buy order basedon broker preferencing, wherein the first remaining volume is the firstvolume minus the first portion; executing, by the computer, the secondbuy order according to the allocation of the second portion;automatically allocating, by the computer, a third portion of a secondremaining volume of the sell order to a third buy order of a marketmaker, wherein the second remaining volume is the first remaining volumeminus the second portion; executing, by the computer, the third buyorder according to the allocation of the third portion; automaticallyallocating, by the computer, a fourth portion of a third remainingvolume of the sell order to a fourth buy order of a long term investor,wherein the third remaining volume is the second remaining volume minusthe third portion; executing, by the computer, the fourth buy orderaccording to the allocation of the fourth portion; automaticallyallocating, by the computer, a fifth portion of a fourth remainingvolume of the sell order based on a time a fifth buy order was placed,wherein the fourth remaining volume is the third remaining volume minusthe fourth portion; and executing, by the computer, the fifth buy orderaccording to the allocation of the fifth portion.

In one aspect, the automatically allocating steps can be performed untilthe sell order is fully filled. The method can further compriseestablishing, by the computer, an initial allocation of a trade volumeto a queue priority owner. The method can further comprise establishing,by the computer, an initial allocation of a trade volume to a designatedmarket maker. The method can further comprise establishing, by thecomputer, a first initial allocation of a trade volume to a queuepriority owner; establishing, by the computer, a second initialallocation of the trade volume to a designated market maker; anddetermining, by the computer, a buy order to fulfill based upon anallocation of the volume compared to the first initial allocation andthe second initial allocation. A buy order can be fulfilled for thedesignated market maker when the queue priority owner is over-allocated.A buy order can be fulfilled for the long term investor when thedesignated market maker is over-allocated.

In another embodiment, a system comprises a trading engine processorconfigured to receive a sell order having a first volume, match the sellorder with a buy order, and execute a trade in an exchange; and a rulesengine processor communicatively coupled to the trading engine processorand configured to automatically allocate a first portion of the firstvolume of the sell order to a first buy order having a best price,automatically allocate a second portion of a first remaining volume ofthe sell order to a second buy order based on broker preferencing,wherein the first remaining volume is the first volume minus the firstportion, automatically allocate a third portion of a second remainingvolume of the sell order to a third buy order of a market maker, whereinthe second remaining volume is the first remaining volume minus thesecond portion, automatically allocate a fourth portion of a thirdremaining volume of the sell order to a fourth buy order of a long terminvestor, wherein the third remaining volume is the second remainingvolume minus the third portion, and automatically allocate a fifthportion of a fourth remaining volume of the sell order based on a time afifth buy order was placed, wherein the fourth remaining volume is thethird remaining volume minus the fourth portion.

In one aspect, the rules engine processor can allocate first volumeuntil the sell order is fully filled. The rules engine processor can befurther configured to establish an initial allocation of a trade volumeto a queue priority owner. The rules engine processor can be furtherconfigured to establish an initial allocation of a trade volume to adesignated market maker. The rules engine processor can be furtherconfigured to establish a first initial allocation of a trade volume toa queue priority owner, establish a second initial allocation of thetrade volume to a designated market maker, and determine a buy order tofulfill based upon an allocation of the volume compared to the firstinitial allocation and the second initial allocation. A buy order can befulfilled for the designated market maker when the queue priority owneris over-allocated. A buy order can be fulfilled for the long terminvestor when the designated market maker is over-allocated.

In one embodiment, a computer-implemented method comprises receiving, bya computer, a message comprising a buy order and an indication of apreference to participate in an auction for the buy order; calculating,by the computer, a national best bid and offer (NBBO); determining, bythe computer, which buy orders satisfy a threshold price and a thresholdvolume; upon a trigger to institute an auction, automaticallytransmitting, by the computer, a message to a participant of a buy orderthat satisfies the threshold price and the threshold volume and thatindicated a preference to participate in the auction; receiving, by thecomputer, a message from the participant providing a volume and amaximum price for the buy order in the auction; applying, by thecomputer, matching logic to automatically allocate the sell order at theNBBO and based upon the buy order in the auction; and executing, by thecomputer, a trade based upon the automatic allocation.

In one aspect, the method can further comprise disseminating, by thecomputer, a trade report based on the allocation of the sell order. Themessage to the participant can be transmitted one second before theauction. The message from the participant can be automatically generatedby a computer of the participant. The sell order can be allocated at theNBBO to a buy order when the buy order has a maximum price that isgreater than the NBBO. The method can further comprise establishing, bythe computer, a minimum price for participating in the auction;establishing, by the computer, a minimum volume for participating in theauction; determining, by the computer, whether the participant indicatedthe preference to participate in the auction; and determining, by thecomputer, whether the buy order satisfies the minimum price and theminimum threshold, wherein the message is transmitted to the participantwhen the participant indicated the preference to participate in theauction and the buy order satisfies the minimum price and the minimumthreshold. The auction can be conducted for a dark order book. Theallocation of the sell order can occur in the following sequence: (1)subject to market maker volume allocation; (a) against offsettingliquidity providing orders entered by the same participant according tothe time priority of the offsetting order; then (b) against offsettingliquidity providing orders according to size-time priority; then (2)against offsetting committed volume entered by the same participantaccording to the time priority of the committed volume; then (3) againstoffsetting committed volume according to size-time priority.

In another embodiment, a system comprises a trading engine processorconfigured for: receiving a buy order message comprising an indicationof a preference to participate in an auction for the buy order;calculating a NBBO; determining which buy orders satisfy a thresholdprice and a threshold volume; transmitting a message to a participant ofa buy order that satisfies the threshold price and the threshold volumeand indicates a preference to participate in the auction; receiving amessage from the participant providing a volume and a maximum price forthe buy order in the auction; applying matching logic to automaticallyallocate the sell order at the NBBO and based upon the buy order in theauction; and executing a trade based upon the automatic allocation.

In one aspect, the trading engine processor can be further configuredfor disseminating a trade report based on the execution of the trade.The message to the participant can be transmitted one second before theauction. The message from the participant can be automatically generatedby a computer of the participant. The sell order can be allocated at theNBBO to a buy order when the buy order has a maximum price that isgreater than the NBBO. The trading engine processor can be furtherconfigured for: establishing a minimum price for participating in theauction; establishing a minimum volume for participating in the auction;determining whether the participant indicated the preference toparticipate in the auction; and determining whether the buy ordersatisfies the minimum price and the minimum threshold, wherein themessage is transmitted to the participant when the participant indicatedthe preference to participate in the auction and the buy order satisfiesthe minimum price and the minimum threshold. The auction can beconducted for a dark order book. The allocation of the sell order canoccur in the following sequence: (1) subject to market maker volumeallocation; (a) against offsetting liquidity providing orders entered bythe same participant according to the time priority of the offsettingorder; then (b) against offsetting liquidity providing orders accordingto size-time priority; then (2) against offsetting committed volumeentered by the same participant according to the time priority of thecommitted volume; then (3) against offsetting committed volume accordingto size-time priority.

In accordance with some embodiments, the transaction order processor isfurther configured to: partially execute one of the proposed orderrequest or the copy of the proposed order request such that there is aremaining unexecuted order size; and make a corresponding update to theother of the proposed order request or the copy of the proposed orderrequest using the linking.

DRAWINGS

Various aspects and embodiments, and advantages offered thereby, areshown in the drawings, and described in connection therewith.

FIG. 1 provides an example schematic diagram of a system for automatedtrading of financial interests according to some embodiments describedherein.

FIG. 2 provides an example schematic diagram of a system for automatedtrading of financial interests according to some embodiments describedherein, including an example, non-limiting summary of features,services, systems, and processes provided or otherwise enabled by darkbooks.

FIG. 3 provides an example schematic diagram of a system for automatedtrading of financial interests according to some embodiments describedherein, including an example, non-limiting summary of features,services, systems, and processes provided or otherwise enabled by hybridbooks.

FIGS. 4A, 4B, and 4C provide an example flow chart diagram, exampleorders for lit books, hybrid books, and dark books, and an example orderfor transaction execution for a hybrid book according to someembodiments described herein.

FIG. 5 provides an example schematic diagram of a system for automatedtrading of financial interests according to some embodiments describedherein, including an example, non-limiting summary of features,services, systems, and processes provided or otherwise enabled by litbooks.

FIG. 6 provides an example schematic diagram of a system for automatedtrading of financial interests according to some embodiments describedherein, including an example, non-limiting summary of features,services, systems, and processes provided or otherwise enabled bycrossing books.

FIGS. 7A to 7H provide diagrams relating to a system for automatedaggregation of market data related to financial interests according tosome embodiments described herein.

FIGS. 8 to 11 provide an example schematic diagram of a system forautomated trading of financial interests according to some embodimentsdescribed herein.

FIGS. 12 to 15 provide an example flow chart diagrams of a method forautomated trading of financial interests according to some embodimentsdescribed herein.

FIG. 16 illustrates an example of an order book matched under aprice/time scenario and a Pro Rata scenario according to someembodiments described herein.

FIGS. 17A, 17B, and 17C illustrate an example of order book matchedunder a size-time weighted scenario according to some embodimentsdescribed herein.

FIG. 18 illustrates an example system including segmentation processor370 according to some embodiments described herein.

FIG. 19 illustrates an example method implemented by segmentationprocessor 370 to approve or deny order requests according to someembodiments described herein.

FIG. 20 illustrates an example of potential segmentation table usingmarket participant ID.

FIG. 21 illustrates an example of potential segmentation table using tagand tag value according to some embodiments described herein.

FIGS. 22 to 24 illustrate schematic diagrams for systems for privatefinancing according to some embodiments described herein.

FIGS. 25 to 31 illustrate flow chart diagrams for private financingaccording to some embodiments described herein.

FIG. 32 illustrates a system overview for placing and trading a derivedorder, according to some embodiments described herein.

FIG. 33 illustrates a process for placing and trading a derived orderaccording to some embodiments described herein.

FIG. 34 illustrates a schematic of order creation options is shownaccording to an exemplary embodiment.

FIG. 35 illustrates a method according to an exemplary embodiment.

FIG. 36 illustrates a system for taking liquidity pursuant to animplemented latency is shown according to an exemplary embodiment.

FIG. 37 illustrates view of orders in a dark order book before a size upauction according to an exemplary embodiment.

FIG. 38 illustrates a method for conducting a size up auction accordingto an exemplary embodiment.

FIG. 39 illustrates a matching priority for a volume allocation routeraccording to an exemplary embodiment.

These drawings depict exemplary embodiments for illustrative purposes,and variations, alternative configurations, alternative components andmodifications may be made to these exemplary embodiments.

DESCRIPTION OF EMBODIMENTS

The embodiments of the systems and methods described herein may beimplemented in hardware or software, or a combination of both. Theseembodiments may be implemented in computer programs executing onprogrammable computers, each computer including at least one processor,a data storage system (including volatile memory or non-volatile memoryor other data storage elements or a combination thereof), and at leastone communication interface. For example, and without limitation, thevarious programmable computers may be a server, network appliance,set-top box, embedded device, computer expansion module, personalcomputer, laptop, personal data assistant, cellular telephone,smartphone device, UMPC tablets and wireless hypermedia device or anyother computing device capable of being configured to carry out themethods described herein.

Program code is applied to input data to perform the functions describedherein and to generate output information. The output information isapplied to one or more output devices. In some embodiments, thecommunication interface may be a network communication interface. Inembodiments in which elements of the invention are combined, thecommunication interface may be a software communication interface, suchas those for inter-process communication. In still other embodiments,there may be a combination of communication interfaces implemented ashardware, software, and a combination thereof.

Each program may be implemented in a high level procedural or objectoriented programming or scripting language, or a combination thereof, tocommunicate with a computer system. However, alternatively, the programsmay be implemented in assembly or machine language, if desired. Thelanguage may be a compiled or interpreted language. Each such computerprogram may be stored on a storage media or a device (e.g., ROM,magnetic disk, optical disc), readable by a general or special purposeprogrammable computer, for configuring and operating the computer whenthe storage media or device is read by the computer to perform theprocedures described herein. Embodiments of the system may also beconsidered to be implemented as a non-transitory computer-readablestorage medium, configured with a computer program, where the storagemedium so configured causes a computer to operate in a specific andpredefined manner to perform the functions described herein.

Furthermore, the systems and methods of the described embodiments arecapable of being distributed in a computer program product including aphysical, non-transitory computer readable medium that bears computerusable instructions for one or more processors. The medium may beprovided in various forms, including one or more diskettes, compactdisks, tapes, chips, magnetic and electronic storage media, volatilememory, non-volatile memory and the like. Non-transitorycomputer-readable media may include all computer-readable media, withthe exception being a transitory, propagating signal. The termnon-transitory is not intended to exclude computer readable media suchas primary memory, volatile memory, RAM and so on, where the data storedthereon may only be temporarily stored. The computer useableinstructions may also be in various forms, including compiled andnon-compiled code.

Throughout the following discussion, numerous references will be maderegarding servers, services, interfaces, portals, platforms, or othersystems formed from computing devices. It should be appreciated that theuse of such terms is deemed to represent one or more computing deviceshaving at least one processor configured to execute softwareinstructions stored on a computer readable tangible, non-transitorymedium. For example, a server can include one or more computersoperating as a web server, database server, or other type of computerserver in a manner to fulfill described roles, responsibilities, orfunctions. One should further appreciate the disclosed computer-basedalgorithms, processes, methods, or other types of instruction sets canbe embodied as a computer program product comprising a non-transitory,tangible computer readable media storing the instructions that cause aprocessor to execute the disclosed steps. One should appreciate that thesystems and methods described herein may execute transactions betweenbuyers and sellers, particularly configure hardware with control logic,transmit, process and store data signals representing, transactions, andso on.

The following discussion provides many example embodiments of theinventive subject matter. Although each embodiment represents a singlecombination of inventive elements, the inventive subject matter isconsidered to include all possible combinations of the disclosedelements. Thus if one embodiment comprises elements A, B, and C, and asecond embodiment comprises elements B and D, then the inventive subjectmatter is also considered to include other remaining combinations of A,B, C, or D, even if not explicitly disclosed.

As used herein, and unless the context dictates otherwise, the term“coupled to” is intended to include both direct coupling (in which twoelements that are coupled to each other contact each other) and indirectcoupling (in which at least one additional element is located betweenthe two elements). Therefore, the terms “coupled to” and “coupled with”are used synonymously.

Embodiments described herein address a need or provide an alternativefor systems, methods, hardware platforms, products, techniques forautomated trading of financial instruments.

Embodiments described herein may provide systems, methods, hardwareplatforms, products, techniques for automated trading of financialinterests with improved market structure. The improved market structuremay provide quality of execution for all orders (large and small) fordifferent financial interests by various market participants on variousnetworked venues. For example, a smart order router (e.g. computerhardware particularly configured to route orders according toembodiments described herein) may be configured to address book fadingand promote maximum order fill rates. A dark book and a hybridtransparent order book may be configured to prevent or address predatorystrategies, and incentivize market maker strategies. A lit book may beconfigured to favor long term strategics and enable market makers tofulfill their quoting obligations. A crossing book may be configured tosupport execution of trade prints and opening executions during, and inadvance of continuous trading phase availability. The hardware platformmay be configured to use a specific order marker or attribute(regulatory or non-regulatory) to identify strategies to prevent orfavor a type of order, order instruction, or participant type. As anexample, specific market participants may be restricted to certain typesof activities and order types. By way of illustrative example, the shortmarking exempt (SME) marker users may be generally arbitrage accounts,and non-directional trading accounts that hold nominal positions at theend of each trading day.

Embodiments described herein may provide systems, methods, hardwareplatforms, products, techniques for automated trading of financialinterests with cost reduction. For example, embodiments described hereinmay be configured to prevent or eliminate a maker/taker model forvarious networked venues with reduced or no fees for active retailtrading flows. Embodiments described herein may be configured to providerebates for resting orders in lit books, or other order books.Embodiments described herein may be configured to provide costreductions for opening auction event trading.

Embodiments described herein may provide systems, methods, hardwareplatforms, products, techniques for automated aggregation of market datarelated to financial interests. The aggregation of market data may bereferred to as a consolidated view. The quality of market data providedby a consolidated market view may be superior to specific trading venueor marketplace data. For example, the consolidated market view mayinclude data for all dealers' orders regardless of the venue to whichthey are sent. The consolidated view may leverage a strong market makingmodel. The consolidated market view may provide a cost reduction. Theconsolidated market view may include generic market data available,visible or accessible to a number of market participants, and may alsoinclude market data only available, visible or accessible to the marketparticipant requesting the consolidated market view (e.g. private marketdata). Agreements between market participants may facilitate sharing ofprivate market data between market participants.

Embodiments described herein may provide systems, methods, hardwareplatforms, products, techniques for automated trading of financialinterests with issuance solutions driven by issuers' successes. Forexample, there may be a listing venue based hardware platform configuredto provide data and features for structured products, and issuer readyto be publicly listed. The listing venue may be focused on ensuringadequate liquidity and process efficiency with competitive fees.

Embodiments described herein may provide systems, methods, hardwareplatforms, products, techniques for automated trading of financialinterests with an exempt financial interest marketplace. As anillustrative example, the exempt financial interest marketplace may beconfigured for issuers and qualified investors. The exempt financialinterest marketplace may be targeted to various market participants andintermediaries, such as dealers, investors, issuers, experts, advisors,referral networks, and other types of market participants andintermediaries. The exempt financial interest marketplace may beconfigured for simplicity, efficiency, and competitive fees. The exemptfinancial interest marketplace may be configured for coaching andsupport for small to mid-size issuers, and other private organizations,market participants, and intermediaries.

FIG. 1 is a schematic diagram showing both functional aspects andfeatures of a networked system for processing transactions in stocks,bonds, and other financial instruments in accordance with embodimentsdescribed herein. In the embodiment shown, a transaction data processingsystem 100 comprises one or more smart order routers 150 and a pluralityof electronic networked venues 110 (e.g. electronic marketplaces, orderbooks, exchanges, alternative trading systems, markets, trading hooks,and so on). Example electronic networked venues 110 include order books.Example types of order books include dark hooks 112, hybrid books 114,lit books 116, and/or crossing books 118.

An order book may be an electronic listing of proposed order requeststhat trading venues (e.g. exchanges) use to record the interest ofbuyers and sellers in a particular financial instrument. An order bookmay contain an electronic listing of proposed order requests, where eachproposed order request may list a type of order, a market participantidentifier, a quantity, a price level, and other attributes orparameters. A matching engine may use the order book to determine whichorders can be fulfilled i.e. what trades can be made.

A trading book may be a list of financial interests at different pricesor other characteristics for market participants (e.g. dealer, investor,brokerage, financial institution). Financial interests listed in atrading book may be purchased, sold or otherwise transferred by marketparticipants (e.g. dealers) to facilitate trading for themselves, orother market participants (e.g. investors, customers of dealers), toprofit from changes in market price or trading spreads between the bidand ask prices, to hedge against various types of risk, and so on. Atrading book may record a list of trading interests indicating aninterest to buy or sell a financial interest, for example.

Transaction data processing system 100 is configured to receive, fromone or more market participant system(s) 300 (referred to by way ofillustrative example as dealer systems 300), signal data setsrepresenting instructions relating to transfer, trade, purchase, sale,hid, offer and/or other transaction requests, and/or other processes,relating to transactions in financial interests (e.g. financialinstruments, stocks, bonds, and/or any other compatible type(s) ofinstruments and/or other financial interests). In the embodiment shown,transaction data processing system 100 is further configured to provideto any one or more other electronic networked venues 110, 200 the sameand/or other signal data sets relating to such transactions and/orprocesses. Networked venues may be used herein to refer to order books,venues, financial interest trading venues, marketplaces, exchanges,alternative trading systems, and/or other markets, and/or various typesthereof. Networked venues may be implemented using networked hardware,and various electrical configurations.

Communications between market participant system(s) 300, transactiondata processing system(s) 100, and/or other networked venue(s) 200 maybe accomplished using any suitable means, including for example digitalsignals processed by suitably configured communications network(s) suchas one or more public switched telephone network (PSTNs), the intermit,etc., using any suitable communications protocol(s).

As an example of the operation of a transaction data processing system100 in accordance with embodiments described herein, one or more marketparticipants 300 wishing to propose or execute a transaction in one ormore financial interests can access the transaction data processingsystem 100 via suitably-configured network communications connections toprovide suitably-configured transaction data sets comprising anyrequired or otherwise desired transaction parameters or information,including for example identifier(s) associated with interest(s) to betraded, quantity(ies) to be traded, price(s) at which transactions areto be conducted, reserve quantity(ies), etc., and/or any one or morenetworked venue(s) 110, 200 and or type(s) of networked venue(s) 110,200 in which such transactions are to take place. Such dealer(s) orother entity(ies) 300 can further specify that some or all of suchproposed transactions or processes are to be executed on one or moreoutside market(s) and/or other networked venue(s) 200.

Among the many significant advantages offered by a transaction dataprocessing system 100 in accordance with embodiments described herein,is the option, provided to market participant system 300, to route anyor all of such transaction data sets to any or all of networked venue(s)110, 200 via any one or more smart order router(s) 150, which caninclude an order or transaction routers configured for desired type(s)of synchronized or otherwise controlled order routing, including forexample, serial, sweep, and/or latency-normalized routing.

Embodiments described herein may configure various electronic order ortrading hooks to facilitate trades received from market participantsystem 300 via order router 150. Market participants may be used hereinto refer to traders, dealers, investors, advisors, buyers, sellers,vendors, issuers, and other participants directly or indirectly relatedto trading of financial interests. Networked venues 110 may includeelectronic order books (e.g. marketplace order book), and example typesof order or trading books include dark books 112, hybrid books 114, litbooks 116, and/or crossing hooks 118. An order book may be an electroniclisting of proposed order requests. A trading hook may be portfolio orlisting of financial interests associated with market participants (e.g.dealer, investor, brokerage, or financial institution). A trading bookmay be a listing of trading interests by market participants, such asindicating an interest to buy or sell a financial interest. Financialinterests identified in a trading hook may be transferred, traded,purchased or sold by market participants (e.g. dealers) to facilitatetrading for other market participants (e.g. investors, customers ofdealers), to profit from changes in market price or trading spreadsbetween the bid and ask prices, to hedge against various types of risk,and so on. Order books may record a list of proposed orders fordifferent financial interests.

An electronic networked venue 110 (e.g. trading venue, order book,trading book) may be implemented using a general-purpose computingdevice, including a processing unit and a system bus that couplesvarious system components including the system memory such as ROM andRAM to the processor. The networked venue 110 can include a cache ofhigh speed memory connected directly with, in close proximity to, orintegrated as part of the processor. The processor can configure variousmodules of the networked venue 110 to perform various actions. Othersystem memory may be available for use as well. The memory can includedifferent types of memory with different performance characteristics.The networked venue 110 may operate on a computing device with more thanone processor or on a group or cluster of computing devices networkedtogether to provide greater processing capability. The processor caninclude any general purpose processor and a hardware module or softwaremodule configured to control the processor as well as a special-purposeprocessor where software instructions are incorporated into the actualprocessor design. The processor may essentially be a completelyself-contained computing system, containing multiple cores orprocessors, a bus, memory controller, cache, etc. A multi-core processormay be symmetric or asymmetric.

The system bus may be any of several types of bus structures including amemory bus or memory controller, a peripheral bus, and a local bus usingany of a variety of bus architectures. A basic input/output (BIOS)stored in ROM or the like, may provide the basic routine that helps totransfer information between elements within the electronic networkedvenue 110. The electronic networked venue 110 further includes storagedevices such as a hard disk drive, a magnetic disk drive, an opticaldisk drive, a solid state drive, a tape drive or the like. The storagedevice can include hardware or software modules for controlling theprocessor. The storage device is connected to the system bus by a driveinterface. The drives and the associated computer readable storage mediaprovide non-volatile storage of computer readable instructions, datastructures, program modules and other data for the networked venue 110.A hardware module that performs a particular function includes thesoftware component stored in a non-transitory computer-readable mediumin connection with the necessary hardware components, such as theprocessor, bus, display, and so forth, to carry out the desired tradingfunction.

Different types of computer readable media which can store data that maybe accessible by the networked venue 110, such as magnetic cassettes,flash memory cards, digital versatile disks, cartridges, RAMs, ROMs, acable or wireless signal containing a hit stream and the like, may alsobe used in the exemplary operating environment. Non-transitorycomputer-readable storage media may exclude media such as energy,carrier signals, electromagnetic waves, and signals per se.

To enable interaction with the electronic networked venue 110, marketparticipant system 300 may include an input device implementing anynumber of input mechanisms, such as a microphone for speech, atouch-sensitive screen for gesture or graphical input, keyboard, mouse,motion input, speech and so forth. An output device can also be one ormore of a number of output mechanisms. In some instances, multimodalsystems enable a user to provide multiple types of input to communicatewith the electronic networked venue 110 via market participant system300. The communications interface generally governs and manages the userinput and system output.

An electronic networked venue 110 may include individual functionalblocks. The functions these blocks represent may be provided through theuse of either shared or dedicated hardware, including, hut not limitedto, hardware capable of executing software and hardware, such as aprocessor, that is purpose-built to operate as an equivalent to softwareexecuting on a general purpose processor. A processor may be provided bya single shared processor or multiple processors, a microprocessorand/or digital signal processor (DSP) hardware, ROM for storing softwareperforming the operations discussed below, and RAM for storing results.Very large scale integration (VLSI) hardware embodiments, as well ascustom VLSI circuitry in combination with a general purpose DSP circuit,may also be provided.

The logical operations of the various embodiments are implemented as: asequence of control logic or computer implemented steps, operations, orprocedures running on a programmable circuit within a general usecomputer, a sequence of control logic or computer implemented steps,operations, or procedures running on a specific-use programmablecircuit; and/or interconnected machine modules or program engines withinthe programmable circuits.

Transaction data processing system 100 may practice all or part of therecited methods, can be a part of the recited systems, and/or canoperate according to instructions in the recited non-transitorycomputer-readable storage media. Such logical operations can beimplemented as modules configured to control a processor to performparticular functions according to the programming of the module. Thedrawings illustrate various features and advantages provided by varioustypes and/or embodiments of networked venues 110.

Smart order router (SOR) 150 is configured to provide various servicesto market participant systems 300, networked venues 110, and othernetworked venues 200. For example, SOR 150 may provide order protectionacross all lit books 116, route marketable orders based on instructionfrom market participant system 300, route resting orders based oninstruction from market participant system 300, manage routing of ordersfor the purposes of participating in opening and closing auction eventsfor specific listed financial interests. As further examples, SOR 150may provide latency normalization across all venues considered, makedark derived orders available, pre-trade risk management, and so on. Amarket data disseminator may make order details available to marketplaceSORB 150 for routing decisions of orders. As an additional example, SOR150 may route to dark books 112 for the purpose of trading with priceimprovements.

Characteristics of dark book(s) 112, hybrid book(s) 114, lit book(s)116, and crossing book(s) 118 may vary. These are examples of electronicnetworked venues 110.

Dark Books

For example, FIG. 2 provides a schematic of an electronic dark bookimplemented in accordance with embodiments described herein. A dark hook112 is an electronic order or trading book, market or exchange (referredto herein as a networked venue) comprising a data set (stored on apersistent store) representing a book or other listing

of executable proposed transactions in financial and other interests, inwhich, unlike visible trading venues, orders may be placed without theirbeing made visible or otherwise available or distributed to othermarketplace participants.

For example, a dealer wishing to sell a block of stock may use asuitably-configured order processor to generate a data set requesting aproposal for the purchase of a block of stock(s), and transmit thegenerated transaction data set to the transaction order processor 100,which can hold the data set in a data store representing a pool orlisting of executable proposed trades, without making the data visibleto other market participant systems 300 through, for example, agraphical user interface representing an order or trading hook.

Among other features, in the embodiment of dark book 112 shown in FIG. 2the following services and features may be provided:

-   -   Authorization to place orders, or any one or more type(s) of        orders, may be restricted to one or more classes of market        participants (e.g. retail, institutional, long term), types of        order flow, types of customers, and so on. For example, as        shown, liquidity takers may be limited to customers of dealers        who are retail, institutional, or long term investors, while any        or all types of entities may be authorized to provide liquidity.        For example, only traditional (e.g. non-SME, retail,        institutional, long term buy side) order flow may take        liquidity, liquidity providers may be unrestricted, and        liquidity providers and liquidity takers may not define counter        electives. This may be an example of segmentation as described        herein.    -   Authorization to designate eligible counterparties, and/or        classes of counterparties, may be restricted to one or more        classes of market participants. For example, as shown, those        authorized to make such designations may be limited to those who        sell or otherwise provide liquidity.    -   Auctions may be conducted according to any of a wide variety of        formats, and using any of a wide variety of criteria. For        example: multiple and frequent auctions at mid-point and size-up        at mid-point; size-up auction may be performed at previous        auction mid-point auction price or current mid-point auction        price, and may include volume available in dark book; liquidity        providers may indicate which auction they want to participate in        and if they are interested in size-up auction; to participate in        size-up auction liquidity provider orders may be subject to        eligibility criteria; and so on.    -   Buy/sell matchings may be made in accordance with any desired        priority(ies), including preferences for price, brokers, market        makers, long term investors, and/or other participants, and/or        according to order size(s), times, etc. Matching priorities may        be the same as, or different than, those provided in any or all        of dark book(s) 112, hybrid book(s) 114, lit book(s) 116, and/or        crossing book(s) 118. Various matching techniques will be        described herein.    -   All trading may take place within or at the NBBO (national best        bid and offer) or other best bid or offer.    -   There may be no maker/taker fee model or zero fee for retail        liquidity takers.    -   Information pertaining to executed trades may be disseminated        without restrictions, including as described elsewhere herein.    -   Authorized dark liquidity at and within NBBO, by order,        disseminated to SOIL 150 and other eligible SORB.    -   Trading and related data may be published in real time.

Hybrid Books

FIG. 3 describes features and advantages enabled by hybrid books 114(also referred to as lux books or a Neo book) implemented in accordancewith embodiments described herein. Hybrid book(s) in accordance withembodiments described herein include books which share properties ofboth dark book(s) 112 and lit book(s) 116. That is, hybrid books 114 areelectronic order books, trading books, markets or exchanges (referred toherein as a networked venue) that encompass elements of both lit book116 and dark book 112 operating principals into a single order book.

A hybrid order book 114 may be an electronic facility designed to fosterenhanced price discovery through the anonymous dissemination of allquotes aggregated by specified or identified price level, for example,at prices that are best hid or offer (BBO) or within BBO. The hybridbook 114 facility may also provide an electronic environment whereresting orders may trade with reduced likelihood of exposure topredatory taker strategies through the implementation of a “speed bump”(delayed order processing), described below, which disincentive to usepredatory taker strategy to the order book. Active trading may belimited to specified investors (e.g., traditional, retail, institutionalinvestors).

For example, such a hybrid book 114 may display liquidity and permittrading to occur only at or within prices referenced to as national bestbid and offer (NBBO), such as for example at a midpoint thereof, orwithin a predetermined offset set at pricing increments customarily usedor otherwise defined by or for the relevant market or exchange. Suchhybrid book(s) 114 may also display liquidity available (in terms, forexample, of numbers of shares) at each specified price level, withoutdisclosing information pertaining to specific resting, or posted, ordersthat are not at specified price level.

Known approaches to order books may create issues and challenges. Forexample, there may be limited protection from predatory strategiesavailable within lit order books 116. Cost of trading may besignificantly higher in lit order books 116. Pre-trade transparency andprice discovery may not be provided in dark order books 112. Individualorder size detection capabilities may be available in lit order books116, and order aggregation may be available as a data product, howeverit may reduce available information that is used by other participants.

There may be unknown order availability in dark order books 112. Thismay create missed trading opportunity potential, where participatingorganizations must “test” a dark book 112 to determine if any contraside volume exists. There may be a risk of missing a trading opportunityin a transparent hook while the “test” is conducted. There may be a timepenalty associated with dark order books 116. Additional time may berequired to submit an order to a dark order book, 112 if no contra sidevolume is available the participating organization has incurred the timepenalty associated with sending the original order to a dark order book112 before proceeding to another venue (dark, or lit). There may belimited choice and general lack of innovation in lit order books 112.There may be little need for innovation and differentiation as themarket participant may be captive to all protected marketplaces.

A hybrid order book 114 may have limited order transparency based on areference price (e.g. NBBO, BBO). A hybrid order book 114 may establishtrade price based on a price set outside of the system. This may be acharacteristic of a dark order book 112 in that some orders may not betransparent or visible. However, a hybrid order book 114 may also makesome orders visible or transparent based on the reference price (e.g.NBBO, BBO), where details of such orders are visible, transparent, orotherwise displayed to market participant systems 300 (e.g.volumes/price available). This may be a characteristic of a lit orderbook 116 in that some orders may be transparent or visible. Thevisibility of the hybrid order book 114 may be dynamic and updatedregularly. As the outside reference price changes then the displaywindow of the hybrid order book 114 may in turn update based on theupdated reference price.

The hybrid order book 114 combines key operating elements of traditionallit order book and dark order book 112, 116. Resulting from thecombination of these two books, in addition to active ordersegmentation, the hybrid order book 114 is able to provide collectivebenefits which are presently only available in the lit order book or thedark order book 116, 112, not both. For example, a hybrid book 114 mayimplement the following elements (from e.g. dark books 112 and lit books116):

Lit Book:

-   -   order transparency for a set of price levels (e.g. BBO); and    -   enhanced price discovery    -   priority/preferencing.

Dark Book:

-   -   priority/preferencing;    -   some orders may not visible (e.g. referenced price strategy,        price from outside NBBO or BBO); and

Other: implementation of delayed order processing based on submittedorder characteristics.

These are examples only and other elements may be implemented by hybridorder books 114. For example, among other features, in the embodiment ofhybrid order book 114 shown in FIG. 3 the following services andfeatures may be implemented:

-   -   Authorization to place orders, or any one or more type(s) of        orders, may be implemented with delayed order processing. For        example, as shown, liquidity takers may have the delayed order        processing applied if the submitted order meets exchange defined        characteristics, while any or all types of entities may be        authorized to provide liquidity without delayed order processing        being applied. For example, only a specific subset of all        liquidity taking orders may be subjected to delayed order        processing, liquidity providing orders may be unrestricted        (i.e., accepted without delayed order processing being applied),        liquidity providers and liquidity takers may not define counter        electives, and so on.    -   Matching priorities may be the same as, or different than, those        provided in any or all of dark book(s) 112, lit book(s) 116,        and/or crossing book(s) 118. In the embodiment shown, matching        priorities may be, in order, price, broker preferencing, market        maker, and size-time. Various matching techniques will be        described herein.    -   Displayed liquidity can be limited to proposed transactions        associated with price term(s) at or within the NBBO (or BBO), or        within predefined or preferred variations thereof, so that        orders associated with prices within a predefined threshold        window of NBBO may be shown. That is, all trading may take place        within or at the NBBO (or BBO), or within a set amount of NBBO        (or BBO).    -   There may be liquidity at and within the NBBO, by price level,        and trades may be published in real-time.    -   In additional to anonymous dissemination of orders, hybrid        book(s) 114 can allow for automatic execution of aggregated        volumes offered by different liquidity makers at various price        levels, so as to allow combined trading of interests offered at        common price(s).    -   Dissemination of information pertaining to executed trades or        other traders may be restricted in accordance with rules or        regulations of corresponding markets or networked trading        venues,    -   Derived orders to be posted in dark book(s) 112 may be generated        automatically by marking of specific orders by the posting        market participant systems 300.    -   There may be no maker/taker model and zero fee for retail        liquidity takers.

Delayed Orders

Short term investors, such as high frequency traders also referred to as“pro tem” traders, may have predatory strategies and technology that cantake advantage of delays in order processing In an attempt to delay theorders of high frequency traders, the system may implement a latency(i.e., delay) to trade orders of only those participants. Unlike aconventional latency, this delayed order processing (also referred to asa “speed bump”) applies only to particular orders and particularparticipants rather than affecting every participant and every order.

When receiving an order at a venue, the order is analyzed to determinewhether it should be subjected to a latency. The system analyzes thecharacteristics of the order, including parameters such as order type,participant type, order attribute or marker, instrument type, instrumentprice, participant historical order/message to trade ratio, proximity toexchange (e.g., co-location facility), and type of trading strategy. Theorder is sent as a message and includes an trader identification numberso that the system can identify whether the originator (trader) is ahigh frequency trader. The originator may be classified as a highfrequency trader through a self-attestation process during registrationor may be identified through characteristics of historical orders.

If the characteristics of the order and/or the originator appear thatthe order is not from a high frequency trader (e.g., an order from a“pro long” investor such as an institutional retail desk), then theorder will be sent immediately (without delay) for processing by thetrading engine. If the characteristics of the order and/or theoriginator appear to be from a high frequency trader, then the order isgoing to be held for a slight delay before being released to the tradingengine for processing.

In one embodiment, an order entry gateway (OE GW) for a book receives atrade message from a participant. The order entry gateway sends amessage to a trading engine to execute an order. The order entry gatewaycan recognize the order as a pro tem take order (i.e., a high frequencytrader is attempting to take liquidity), so the order entry gateway putsthe order in a queue to wait 5-9 milliseconds before releasing the orderto the trading engine for execution.

Delayed orders in the queue will not be eligible for amendment orcancellation prior to insertion into the order book. If an order issubmitted and identified as qualified for a delay, it cannot becancelled or amended by the order originator until such time as thedelay period has expired and the order is inserted into the order book.Any submitted amend or cancel order request received during this periodwill be rejected by the system. Aggressive orders submitted anddesignated as non-delay qualifying will be submitted to the order bookimmediately upon receipt by the system without a delay period beingapplied. Passive orders submitted by any trader without differentiationwill not be delayed by the system.

Referring to FIG. 36, a system for taking liquidity pursuant to animplemented latency is shown according to an exemplary embodiment. Anorder message is transmitted from a computing device of a long terminvestor 3640 or a short term investor 3650 into an order entry gateway3620 to take liquidity in trading venue 3610, which is a hybrid book inthe exemplary embodiment. The order entry gateway 3620 can determinewhether the order message is originating from the long term investor3640 or the short term investor 3650. The order message may include anidentification of the participant (e.g., trader ID), and the order entrygateway 3640 can check a record in an associated database 3660 todetermine whether the participant is a short term investor or long terminvestor. The order message gateway 3620 can also determine if theparticipant exhibits a pattern of behavior that is more likelyassociated with short term investors. If the order message originatesfrom the long term investor 3640, a message is transmitted from theorder entry gateway 3620 to the trading engine 3630 for execution in thetrading venue 3610. The trading engine may be a processor, a moduleexecuted by a processor, or a specially-programmed server. If the ordermessage originates from the short term investor 3650, a message istransmitted from the order entry gateway 3620, which holds the order ina queue at the order entry gateway 3620, which only instructs thetrading engine 3630 to execute the order after expiration of the delay.The order entry gateway 3620 implements a randomized delay between aminimum and a maximum value before executing the order.

When the order is originating from a high frequency trader that isattempting to take an order at a venue (e.g., the hybrid book), then thesystem will attempt to slow down the order to give others without highfrequency trading (HFT) technology an opportunity to pick up signalsfrom the market and place an order. In this exemplary embodiment, thevenue is a hybrid hook, because the dark book may be retained as havingtraditional dark book characteristics, and a dark book allowssegmentation. In the hybrid book, a HFT population can be slowed downwhile still giving access. However, the latency of particular ordersdoes not need to apply only to the hybrid book as described herein, andit can apply to any type of venue consistent with this disclosure.

Once the order is received to take liquidity, the system determineswhether the originator is a high frequency trader, and then holds theorder for a period of time and processes it after the delay. The delayfrom receipt to execution may last from about 5 milliseconds to about 9milliseconds. In one embodiment, a minimum delay may last 3milliseconds, 5 milliseconds, or 7 milliseconds. In one embodiment, amaximum delay may last 15 milliseconds, 30 milliseconds, 50milliseconds, 100 milliseconds, 150 milliseconds, or 200 milliseconds.When an order is originated from an institution retail desk, there issome latency to the order processing based upon routing to variousdestinations and due to circuit time, all of which can add a fewmilliseconds to the conventional processing of a non-HFT order. So thedelay is intended to account for this systematic delay as well as anadditional few milliseconds.

The length of the delay may be randomized to prevent predictability. Thesystem has a minimum delay and a maximum delay, and the delay applied toa particular order may be any amount of time randomly selected betweenthe minimum delay and the maximum delay. As a result, a HFT has feweradvantages when taking liquidity.

Long term investor (LTI) orders that arrive alter a delayed order (DO)prior to the order delay time expiring will execute ahead of the delayedorder that arrived earlier. As an example, a minimum delay time is 3milliseconds, a maximum delay time is 5 milliseconds, a randomlyselected system delay period is 5 milliseconds, the trading session ispost open, and the order book is a hybrid book. The following buy ordersare received as the specified times:

User Order Time Order Type Type Received TIF Price Size Firm B1 DO LimitT FOK 100.00 300 A B2 DO Limit T + 0.5 ms DAY 99.00 400 X B3 LTI LimitT + 1 ms IOC 100.00 300 B B4 LTI Limit T + 3 ms IOC 100.00 500 C B5 LTILimit T + 6 ms IOC 100.00 1100 C

The following is a sell order S1 that is received:

User Buy Buy Sell Sell Order Order Type Type Firm Size Price Price SizeFirm Order Type Order 100.00 1000 X Limit S1

Order B2 will be immediately inserted into the book as a passive orderas passive participant (non-taker, provides liquidity) orders are notsubject to a delay. The resulting order book will be as follows:

User Buy Buy Sell Sell Order Order Type Type Firm Size Price Price SizeFirm Order Type Order B2 Limit DT X 400 99.00 100.00 1000 X Limit S1

The first order execution will occur for buy order B3 and sell order S1for 300 shares at $100. The second order execution will occur betweenbuy order B4 and sell order S1 for 500 shares at $100. After these orderexecutions, 200 shares at $100 of sell order S1 remain. Buy order B1aggresses the book (i.e., becomes an active order in the book) at timeT+5 milliseconds due to the delay, and the remaining quantity isinsufficient to completely fill buy order B1. Because buy order B1 is afill or kill (FOK) order, the total quantity of buy order B1 iscancelled back to the submitter. The final execution will occur betweenbuy order B5 and sell order S1 for 200 shares at S100. The remainder ofbuy order B5 will be cancelled back.

Derived Orders

Conventional systems allow a participant to place an order in multiplemarketplaces by indicating a multi-legged order in differentmarketplaces. For example, a participant wishing to sell 500 shares mayplace an order for 200 shares in a first marketplace, 200 shares in asecond marketplace, and 100 shares in a third marketplace. In oneconventional system, a smart order router (SOR) will place the 200shares in the first marketplace, then place 200 shares in the secondmarketplace, and then place 100 shares in the third marketplace. Inanother conventional system, a SOR will determine the best price for anorder and route the order to the corresponding marketplace. Thisplacement of orders is very inefficient and can be affected by changesin the marketplaces, whereby values of those shares may change as theshares are routed between each marketplace.

A derived order gives a market participant simultaneous access toliquidity across multiple books, destinations, or marketplaces. Thederived order may be an order that is placed and anchored in onenetworked trading venue (e.g., book or marketplace) and is also placedor exists in one or more other networked trading venues (other books ormarketplaces). An eligible order is posted in multiple venues (e.g.,books or marketplaces) simultaneously, and participants may interactwith the orders residing in any of the venues in which it is placed,whereby order matching will occur in accordance with the matching rulesof the specific book. A derived order may be available for all availablefinancial interests or a segment of financial interests being traded onthe networked trading venue. In the exemplary embodiment, an exchangehas three books: a lit trading book, a hybrid trading book, and a darktrading book. However, each book can represent a marketplace, and thederived order can be implemented in any configuration involving multiplemarketplaces.

Referring to FIG. 32, a system overview is shown for placing and tradinga derived order in an exchange 3208, according to an exemplaryembodiment. A market participant has a computing device 3200 (e.g., apersonal computer, workstation computer, tablet computer, mobile phone,smart phone). The market participant uses the computing device 3200 toplace a derived order by transmitting a message over a network to anorder entry gateway 3202. Once the order entry gateway has validated themessage, the order entry gateway 3202 transmits the message over anetwork to a trading engine processor 3204 (also referred to as atrading engine or a matching engine). Optionally, if the message isdesignated for a smart order router (SOR), the order entry gateway 3202can transmit the message to a SOR 3203, which can route the message tothe trading engine processor 3204.

The trading engine processor 3204 is communicatively coupled to eachvenue, book, or marketplace. The trading engine processor 3204 can beconfigured as a server having a processor, or it may be a moduleexecuted by a processor. The trading engine processor 3204 can be aseparate component from the SOR, or the SOR can be configured toincorporate the functionality of the trading engine. The trading engineprocessor 3204 is communicatively coupled to other lit venues 3206A,3206B outside of the exchange 3208. In this exemplary embodiment, thetrading engine processor 3204 is hosted within the exchange 3208, thoughit is intended that the trading engine processor 3204 can bealternatively configured outside of exchange 3208.

The trading engine processor 3204 is communicatively coupled to a littrading book processor 3216 for a lit trading book, a hybrid tradingbook processor 3214 for a hybrid trading book, and a dark trading bookprocessor 3212 for a dark trading book. The lit trading book processor3216, the hybrid trading hook processor 3214, an the dark trading hookprocessor 3212 can be configured as a server having a processor, or itmay be a module executed by a processor. The trading hook processors3212, 3214, 3216 can be configured to process trades in the respectivetrading books. The trading engine processor 3204 is also communicativelycoupled to a memory 3218, which can be configured as a separate databaseor a storage within a server housing the trading engine processor.

Rather than the market participant 3200 splitting a trading interestacross two separate orders sent to the lit trading hook 3216 and thedark trading book 3212 independently, the market participant 3200 canplace a derived order that transmits the full trading interest to bothtrading books 3216, 3212 simultaneously, increasing tradingopportunities without creating risks of an overfill. If one tradingvenue has more trading activity than the other trading venue, thederived order may allow the market participant to take advantage of thisopportunity. The objective is to maximize the amount of the fill in theshortest period of time by taking advantage of liquidity in differenttrading books or trading venues.

The participant can place an order in one of the books as a derivedorder so that it can be simultaneously replicated in at least one otherhook. A single order cannot be shown in multiple books, but the ordercan be shown in one hook (e.g., lit book) and listed as a hiddenliquidity in one or more other books (e.g., hybrid book and/or darkbook). For example, if the participant wants to place 1000 shares in alit book, then that same order for 1000 shares cannot be shown in thehybrid and/or dark book. So the participant can place the derived orderin the lit hook as an anchor book and replicate the order in the hybridhook or the dark book, where participants can interact with the order,but it is not publicly displayed. Alternatively, the participant canplace the derived order in the hybrid book as an anchor book andreplicate the order in the dark book. More generally, the order can onlybe shown in one hook or marketplace, but it can be replicated in otherbooks or marketplaces where it cannot be publicly displayed. Only oneleg of a derived order can be transparent at any time, which can ensurethat there is never any public overstating of available volume.

In an exemplary embodiment, a derived order may be anchored in a littrading hook 3216 and derived into a dark trading book 3212. The derivedorder may essentially co-exist in both the lit trading book 3216 and thedark trading book 3212 and could trade with other contra-orders sent toeither of these trading books. Alternatively, a derived order mayco-exist on a lit trading hook 3216 and a hybrid trading hook 3214, adark trading book 3212 and a hybrid trading hook 3214, and so on.

Referring to FIG. 34, a schematic of order creation options is shownaccording to an exemplary embodiment. The exemplary system shows a litbook 3400 having transparent lit orders 3405 and hidden lit orders 3410,a dark hook 3420, and a hybrid book 3430. In a first example, a derivedorder can originate as a transparent lit order 3405 and be replicated3440 in the dark book 3420. In a second example, a derived order canoriginate as a hidden lit order 3410 and be replicated 3450 in the darkbook 3420. In a third example, a derived order can originate as a hiddenlit order 3410 and be replicated 3460 in the dark book 3420 and/or thehybrid hook 3430. In a fourth example, a derived order can originate asa hidden lit order 3410 and be replicated 3470 in the hybrid book 3430.In a fifth example, a derived order can originate in the hybrid book3431) and be replicated 3480 in the dark book 3420.

The market participant places the derived order by transmitting amessage from a computing device to a particular book that will act asthe anchor book. Alternatively, the message can be routed to a SOR as adirected order. The message will include an identification of thesecurity, an amount of the security, a price, an amount to place in afirst book (or marketplace), an amount to place in a second book (ormarketplace), and optionally an amount to place in a third book (ormarketplace).

Referring to FIG. 33, an exemplary process is shown for placing andtrading a derived order. In step 3300, a processor receives a messagecomprising an identification of a financial instrument to be traded, anamount of the financial instrument to be traded, and two or more venuesto place an order for a trade of the financial instrument in the amount.In step 3310, the processor simultaneously places an order in a firstvenue for the financial instrument in the amount and an order in asecond venue for the financial instrument in the amount. In one aspect,the venue is a trading book. The first venue can be a lit hook or ahybrid hook. When the first venue is a lit book, the second venue can bea hybrid book and/or a dark book. When the first venue is a hybrid book,the second venue can be a dark book. The order in the first venue ispublicly displayed and the order in the second venue is available butnot publicly displayed. In step 3320, the processor processes a tradefor the order in the first venue or second venue and simultaneouslyupdating the order in other venues that the order was placed based onthe amount of the trade for the order in the first venue.

The trading engine can be configured to replicate an order in differentbooks, and the trading engine can store a record in a memory orassociated database of where each order has been placed in one or morebooks. The trading engine can guarantee that each order is only executedonce. When an order is replicated in different books, the trading enginecan check the stored record to see where the order was placed, and thenadjust or cancel an order in one or more books when it is beingfulfilled in a different hook.

Any action applied to any leg of the derived order will immediately andsystematically be applied to all other legs of the order. For example, aderived order O1 for 1000 shares to be derived in the lit book (as atransparent order) and the dark book. The derived order O1 issystematically and simultaneously posted in both the lit book (as atransparent order) and the dark book. A trade occurs against order O1 inthe lit book for 400 shares. A systematic update is simultaneously andimmediately applied to both the lit book and the dark book order legs,thereby reducing the available volume to 600 shares.

FIG. 35 illustrates a method according to an exemplary embodiment. In3510, a client order is submitted for order O1 as a derived order in alit book (transparent) and a dark hook to sell 1000 shares of ABC at $10each. In 3520, the system validates the order and determines ordereligibility for a derived order. In step 3530, the validation issuccessful. In step 3540, order O1 is posted (sell 1000 shares of ABC at$10 per share) in the lit book (transparent) and the dark book. In step3550, a public order book message is published for the lit hook(transparent) order posting. In step 3560, a client order is submittedfor order request O2 in the dark book to buy 400 shares of ABC at $10per share. In step 3570, lit book execution occurs for orders O1 and O2for 400 shares of ABC at $10 per share. In step 3580, the systemsimultaneously updates the order O1 in the lit book and the dark book toreduce the volume by 400 shares, so the available volume tier trading inthe lit book and the dark book is 600 shares of ABC. At the same time asstep 3580, in 3590, a public execution report publishes for the tradeoccurrence in the lit book.

In one embodiment, the method further comprises canceling the order inthe second venue when the trade is for the amount of the order in thefirst venue. In another embodiment, the method further comprisescanceling the order in the first venue when the trade is for the amountof the order in the second venue. In yet another embodiment, the methodfurther comprises reducing the order in the second venue for a tradeamount of the trade of the order in the first venue. In still yetanother embodiment, the method further comprises reducing the order inthe first venue for a trade amount of the trade of the order in thesecond venue.

A market participant who places a derived order can make changes (e.g.,modifications, amendments, cancellations) to the derived order. If themarket participant makes a change to an anchor book order, the changecan be applied to each of the co-existing orders in other books at thesame time. If the market participant makes a change to an order in anon-anchor book, the changes can be applied at the same time to theanchor book order and any other co-existing orders in other hooks.Accordingly, a derived order may be duplicated onto multiple tradingvenues, where changes to any of the duplicated orders are propagated tothe other trading venues.

The system guarantees that a derived order will not be filled induplicate and an order will not over-fill. While portions of the ordermay be fulfilled in different books, the same order cannot be duplicatedin two books. A derived order may be posted such that it may trade withorder flow sent to each of the trading venues in which the derivedorders are placed without causing an overfill of the original order.When a trade occurs in one trading venue (e.g., book or marketplace) fora certain quantity, the quantity in the other trading venue(s) (e.g.,hook or marketplace) reduces the co-existing order by the quantity ofthe trade. If the trade is for the entire order, then the co-existingorder in the other book will be canceled. If the trade is for a portionof the order, then the co-existing order in the other hook will beadjusted (decreased) by the amount of the trade. For example, if aderived order places 1000 shares in the lit book and 1000 shares in thehybrid book, a fulfillment of the hybrid book order will cause the orderin the lit book to be canceled. In another example, if a derived orderhas 1000 shares in the lit book and 1000 shares in the hybrid book, afulfillment of 500 shares in the hybrid book will cause the order in thelit book to be reduced to 500 shares. As a result, there is no risk ofduplicate sales.

Hybrid trading books 114 may provide various benefits. For example,there may be reduced administrative fees or costs. Order bookutilization may be optional for participating organizations, andassociated costs are therefore optional. There may be creation of pricediscovery through the dissemination of a market by price feed. There maybe reduced single order size detection through the aggregation of allquotes by price level. There may be elimination of predatory takerstrategy interaction for resting orders creating a safe environment inwhich passive liquidity providers can quote with size. Active ordersubmission may be restricted to specified participants exclusively.

Enhanced order management capabilities may be obtained by leveragingavailable order types which facilitate the posting of an order in boththe hybrid trading or order book and dark trading or order book 114, 112simultaneously. There may be the capability to provide enhanced accessto liquidity through the elimination of quote fading (e.g. the postingof an order followed by the immediate removal and replacement of theorder at an inferior price). An order may first be submitted to the hookin attempt to draw contra side orders attempting to match at theoriginally posted price. There may be an implementation of a minimumorder life restriction that systematically disallows the cancellation ofan order for a defined period of time after order entry or modification.

The following provides an illustrative example of a hybrid trading ororder book 114 market data. A financial interest represented by symbolXYZ is bid at $10.00 and offered at $10.03 across all Canadian lit bookmarkets 116. A hybrid bid may include $10.01 at 1000 shares, $10.00 at1000 shares, and $9.99 at 1500 shares. The first two bids of $10.01 at1000 shares and $10.00 at 1000 shares may be displayed and tradable butonly accessible to specified market participants. The last hid of $9.99at 1500 shares may be hidden from market participant processor 300 andnot tradable due to NBBO.

The following provides another illustrative example of a hybrid tradingor order book 114 market data. A financial interest represented bysymbol XYZ is bid at S9.99 and offered at $10.03 across all Canadian litbook markets 116. A hybrid hid may include $10.01 at 1000 shares, $10.00at 1000 shares, and $9.99 at 1500 shares. Now all bids may be displayedand tradable due to NBBO change (as compared to first example). Again,the bids may be only accessible to specified market participants.

FIG. 4A illustrates a flow chart diagram of a method 70 for hybrid orderexecution. The method may involve providing an hybrid order book 114 viaa processor and a persistent data store. At 72, transaction orderprocessor 100 may receive, from a dealer processors 300, signalsdefining data sets representing proposed order requests to executetransactions in financial interests for submission to the hybrid orderbook 114. At 74, a persistent data store may store the proposed orderrequests and order conditions for the hybrid order book. Example orderconditions are provided herein. The order conditions may define whenproposed order requests are displayable and tradable. For example, anorder condition may compare the price of the order to the NBBO level. Ifthe order is outside the NBBO then the order may not be displayable andtradable. If the order is within the NBBO then the order may bedisplayable and tradable. An order condition may be based on the marketparticipant from whom the order was received. For example, an ordersubmitted by a type of market participant may be displayable andtradable, whereas an order submitted by another type of marketparticipant may not be displayable and tradable. An order condition mayalso be based on the type of order, e.g. active or passive orders. Theorder conditions may be a combination of elements from lit books 116 anddark books 112.

At 76, for each proposed order request, transaction order processor 100applies the order conditions for the hybrid order book 114 to theproposed order request to determine whether the proposed order requestis displayable and tradable.

At 78, if the proposed order request is not displayable then it ishidden from view. If the proposed order request is not tradable, then arejection notification may be transmitted to the corresponding marketparticipant system 300 the order request was received from.

Upon determining that the proposed order request is displayable andtradable, at 80, the order is displayed as part of the hybrid book 114.At 82, the transaction order processor 100 executes one or moretransactions based on the proposed order request.

FIG. 4B illustrates an examples of a lit book 116 order, a hybrid bookorder 114, and a dark book order 112.

For the example shown in FIG. 4B a financial interest may be hid at$10.00 and offered at $10.03 across all Canadian lit book markets 116(as an example NBBO). Example different order books are shown for thebid side only, as an illustrative example. Orders may also be ofdifferent types, such as offer side, for example. An electronic orderrecord or listing may include various attributes including orderidentifier, market participant identifier (e.g. dealer identifier,investor identifier), bid volume, bid price.

Illustrative example (bid side) orders for a lit order book 116 may bean order 01 received from market participant M1 may be for 1000 sharesof a specific financial interest at $10.01, an order 02 received frommarket participant M2 may be for 1000 shares of the specific financialinterest at $10, and an order 03 received from market participant M3 maybe for 1500 shares of a specific financial interest at $9.99. For theseexample orders for a lit order book 116, all available order volume maybe visible, such as via a user interface display. Illustrative example(bid side) orders for a hybrid order book 114 may be an order 01received from market participant M001 may be for 1000 shares of aspecific financial interests at $10.01, an order 02 received from marketparticipant M002 may be for 1000 shares of a specific financial interestat $10, and an order 03 received from market participant M003 may be for1500 shares of a specific financial interest at $9.99. For these exampleorders for a hybrid order book 114, order 01 volume may be publicallyaccessible anonymously at $10.01, and order 02 volume may be publicallyaccessible anonymously at 10, such as via a user interface display.Order 03 may not be visible as it is outside of the NBBO.

Illustrative example (bid side) orders for a dark order honk 112 may bean order 01 received from market participant M1 may be for 1000 sharesof a specific financial interest at $10.01, an order 02 received frommarket participant M2 may be for 1000 shares of a specific financialinterest at $10, and an order 03 received from market participant M3 maybe for 1500 shares of a specific financial interest at $9.99. For theseexample orders for a dark order book 112, no order volume may bevisible.

Accordingly, for this illustrative example, order volume submitted tolit order books 116 may be visible, order volume submitted to hybridorder books 114 may be or may not be visible depending on the bid pricerelative to the NBBO, and order volume submitted to dark order books 112may not be visible.

FIG. 4C illustrates an example hybrid order execution. A marketparticipant 300 referenced by number 443 may be a specified marketparticipant (e.g. non-SME and retail), and submits a sell order of 4,500shares at market. Assumption and references for this example are marketmaker market participant processor 300 referenced by number 445. TheNBBO may be a bid volume of 1,000 shares, a bid price of $9.00, an askprice of $9.01, and an ask volume of 1,000 shares. A matching prioritymay process orders to match sell orders and buy orders. For example, thematching priority may be implemented as programming logic to configure aprocessor to match orders based on price, broker preference, marketmaker, and size/time. Other matching priorities may be used. An examplehybrid trading or order book is shown in FIG. 4C with order 34identifier A, order identifier B, order identifier C, and orderidentifier D, along with corresponding hid dealer references, ordertypes, hid volumes, bid price, and size/time ranking. These are exampleorder attributes and others may be provided and considered for orderprocessing. The execution results maybe no matching based on brokerpreference. Order identifier B may match first due to market maker whichmay trigger a publish trade 1,300 at $9.01. Order identifier D may matchnext due to price which may trigger a publish trade 2,700 at $9.01.Order identifier C may match next due to price which may trigger apublish trade 5,00 at $9.01. The order may be fully filled and orderidentifier C may have 600 shares remaining in the book. Order identifierA may have the full remaining volume in the book.

Lit Books

FIG. 5 describes features and advantages enabled by lit books 116implemented in accordance with embodiments described herein. A lit book116 is an electronic trading or order book, market or exchange (referredto herein as a networked venue) in which at least price and initialquantity terms of proposed transactions in specified interests arevisible and available to all authorized market participants 300.

Among other features, in the embodiment of lit book 116 shown in FIG. 5:

-   -   Unlike as in dark book(s) 112 and hybrid book(s) 114, in lit        book(s) 116 authorization to both buy and sell is not limited to        any type(s) or class(es) of market participants, other than to        those who are qualified members of the venue 110, 200. That is,        liquidity takers may be unrestricted, liquidity providers may be        unrestricted, liquidity providers and liquidity takers may not        choose counterparties (e.g. based on characteristics of        counterparties).    -   Matching priorities may be the same as, or different than, those        provided in any or all of dark book(s) 112, hybrid book(s) 114,        and/or crossing book(s) 118. in the embodiment shown, matching        priorities are, in order, price, broker preferencing, market        maker, traditional investors (e.g. specified market participant,        not exempt from requirements to mark short orders, nOn-SME,        non-HFT), then the time at which a proposed transaction was        posted. Various matching techniques will be described herein    -   Auction trading may be open and closed across specific financial        interests.    -   Maker taker fee model may be similar to other venues (e.g.        active pays fees, passive gets rebates).    -   Liquidity at all levels by order and trades published in real        time. That is, information pertaining to orders and executed        trades may be disseminated without restrictions, including as        described elsewhere herein.    -   Liquidity providers can mark orders to generate derived orders        in dark books 112 (identical characteristic), hybrid hooks 114        and/or other hooks. That is, derived orders to be posted in dark        book(s) 112 may be generated automatically by marking of        specific orders by the posting market participants 300.

Crossing Books

FIG. 6 describes features and advantages enabled by crossing hooks 118implemented in accordance with embodiments described herein. A crossingbook 118 is an electronic trading or order book, market or exchange(referred to herein as networked venue) in which both sides of a tradeare provided simultaneously; thereby eliminating the need for individualorders to be placed by participants for a “match” to occur. Thus, forexample, instead of requiring a party to hit or lift a bid or offer, asingle transaction will be posted by a participant with bid and offerside details provided.

Among other features, in the embodiment of crossing hook 118 shown inFIG. 6:

-   -   Information pertaining to executed trades may be disseminated in        accordance with any desired instructions, and/or any applicable        exchange rules, regulations, or laws.    -   Crossing facility may be provided for all financial interests        available for trading by the venue,    -   Trade print (i.e. cross) or trade execution posting may be        restricted based on a set of defined parameters which may        include, all or a sub-set of the following        -   Listing venue        -   Cross (trade) price        -   Time of cross submission        -   Prices on other trading venues

For crossing books 118, there may be no orders submitted for matching.Instead, there may be posting of a trade (e.g. with both the bid and askside of the trade submitted at the time of entry).

Consolidated Market Data View

Also among the many advantages offered by transaction data processingsystem(s) 100 in accordance with the embodiments described herein is theability to provide consolidated market views or reports based on tradingand market data, including new combinations of information specific tousers or groups of users. Reports may refer to interface market views,display views, information work, presentations of data, and so on. Forexample, a consolidated report or market view may provide a marketparticipant with a full view of its own electronic book and othervisible market or trading data. There may also be agreements betweenvarious market participants to permit and facilitate sharing of data. Asanother example, a consolidated report or market view may provide amarket participant with a full view of its own electronic book, othervisible data (e.g. public market data), and other private data wherevisibility is permitted for the market participant based on agreements.

A generic view (i.e. non-user specific) of visible market data specificto the marketplace that is producing/providing the corresponding dataproduct may not give a complete view of all market data relevant to auser.

There may currently be a lack of user specific data products, and a “onesize fits all” model may not be tailored to specific users. This mayincrease user costs which may be significant as a market data feed mustbe sourced from each individual marketplace the user is interested in.For example, users may be subject to the following costs: marketplacedata fees, technical infrastructure costs supporting delivery of thefeed from its source, network infrastructure costs, data centre andphysical hardware costs, feed management and support (feed changeimplementation/issue resolution) costs.

The Consolidated Market View (CMV) platform may provide a market dataproduct that combines visible marketplace data feeds from one, all, or asubset of available marketplace data feeds (e.g. lit hook and hybridhooks 116, 114, trading venues and so on) with one, all, or a subset ofall available market participant processor 300 (i.e. participatingorganization) private drop copy or other sources which have beennormalized into a common format for dealer consumption. The CMV platformmay provide its users with a complete view of all markets from whichmarket data has been sourced and, on which marketplace each of theparticipating organization(s) orders reside with respect to a fullmarketplace view.

A service, platform, facility, or product, for example, may be providedby deploying the CMV processing engine at the site of the transactiondata processing system 100 or remote at a client site (e.g. at site ofmarket participant system 300). The operational management of the CMVmay be conducted by administrative personnel. Marketplace data feedsourcing may be the responsibility of the deployment site host or by theadministrative site, for example.

The CMV platform may include an information processor to collect,process and aggregate visible order and trade information from all or asubset of marketplaces. The CMV platform may aggregate marketparticipant processor 300 specific market data including visible orderand trade information from all or a subset of marketplaces withaggregated and normalized private order and trade information from one,all or a subset of participating organizations (e.g. multiple dealers300). The CMV platform may collect and process visible order and tradeinformation from all or a subset of marketplaces with dealer attributedprivate order (e.g. an individual market participant processor 300) andtrade information (both visible publicly and not visible publicly) fromone, all or a subset of participating organizations.

The CMV platform may provide a variety of services. For example, the CMVplatform may provide user customized view of market data unique to eachuser or market participant processor 300 (enrichment elements can beuser specific). The CMV platform may provide a (user specific) completemarket view. The CMV platform may provide a single source of all visible(venue agnostic) market data complemented with specific user privatemarket data (i.e. user has ability to track/trace all of their order andtrade activity within a single market data source). The CMV platform mayprovide a relational view of client orders against the market (all or asubset of marketplaces). The CMV platform may allow for a user to easilyand clearly identify where their orders (both visible publicly and notvisible publicly) reside at an given time relative to all other ordersin the trading networked venue. The CMV platform may provide a costreduction mechanism, such that the CMV platform may be utilized as asingle source feed for all market data which may reduce costs. The CMVplatform may provide reduced feed costs. The CMV platform may reduceadministrative burden and associated costs. The CMV platform may reducetechnology overhead requirements (and costs). The CMV platform may beeasily leveraged to create a competitive consolidated data source.

FIG. 7A provides a high level overview of the CMV platform. Datarepresenting orders and other transaction-related information generatedby dealer(s) and other trader(s) or entity(ies) 300 can be routed toboth networked venues 110, 200, for execution and other purposes, and todrop-copy order/execution management (OMS/EMS) database(s) 160. Inaddition, data related to trades executed by any or all of networkedvenues 110, 200 can be routed to a market data base 180.

The CMV platform may include an aggregation engine 190 configured withcontrol logic to receive, by pull, push and/or other desired techniques,data from data storage devices 160, 180, apply any desired reformattingto conform to any desired protocol(s), e.g., FIX, and consolidated (oraggregated); and any desired (sub)set(s) of data may be used to providedesired reports and/or feeds to regulators, news providers, and/or otherinternal and/or external recipient(s) 250, in any desired format(s).

The CMV platform may use aggregation engines 190 to collect marketparticipant 300 private order messages and exchange visible informationmessages in real time. The CMV platform may use aggregation engines 190to aggregate and synchronize flows to produce dealer specific marketdata with full view of all the market participant's (e.g. dealer in thisillustrative example) 300 orders (both visible publicly and not visiblepublicly) in some or all of the different trading venues. The CMVplatform may use aggregation engines 190 to disseminate data to marketparticipants via standard data distributors and discount platforms.

The CMV platform and components thereof (e.g. an aggregation engine 190)may include one or more computing devices operable by users to accessremote network resources. The computing devices may be the same ordifferent types of devices. The computing device may be implementedusing one or more processors and one or more data storage devicesconfigured with database(s) or file system(s), or using multiple devicesor groups of storage devices distributed over a wide geographic area andconnected via a network (which may be referred to as “cloud computing”).

The CMV platform and components thereof (e.g. an aggregation engine 190)may reside on one or more networked computing devices, such as apersonal computer, workstation, server, portable computer, mobiledevice, personal digital assistant, laptop, tablet, smart phone, WAPphone, an interactive television, video display terminals, gamingconsoles, electronic reading device, and portable electronic devices ora combination of these.

The CMV platform and components thereof (e.g. an aggregation engine 190)may include any type of processor, such as, for example, any type ofgeneral-purpose microprocessor or microcontroller, a digital signalprocessing (DSP) processor, an integrated circuit, a field programmablegate array (FPGA), a reconfigurable processor, a programmable read-onlymemory (PROM), or any combination thereof. CMV platform may include anytype of computer memory that is located either internally or externallysuch as, for example, random-access memory (RAM), read-only memory(ROM), compact disc read-only memory (CDROM), electro-optical memory,magneto-optical memory, erasable programmable read-only memory (EPROM),and electrically-erasable programmable read-only memory (EEPROM),Ferroelectric RAM (FRAM) or the like.

The CMV platform and components thereof (e.g. an aggregation engine 190)may include one or more input devices, such as a keyboard, mouse,camera, touch screen and a microphone, and may also include one or moreoutput devices such as a display screen and a speaker. The CMV platformand components thereof (e.g. an aggregation engine 190) may have networkinterfaces in order to enable communication between system components,to access and connect to network resources, to serve an application andother applications, and to perform other computing applications byconnecting to a network (or multiple networks) capable of carrying dataincluding the Internet, Ethernet, plain old telephone service (POTS)line, public switch telephone network (PSTN), integrated servicesdigital network (ISDN), digital subscriber line (DSL), coaxial cable,fiber optics, satellite, mobile, wireless (e.g. Wi-Fi, WiMAX), SS7signaling network, fixed line, local area network, wide area network,and others, including any combination of these. There may be more CMVplatforms distributed over a geographic area and connected via anetwork. The CMV platform is operable to register and authenticate users(using a login, unique identifier, and password for example) prior toproviding access to applications, a local network, network resources,other networks and network security devices. The CMV platform may usedifferent types of devices and may serve one user or multiple users.

FIG. 7B provides a logical view of the CMV platform. Input data sources220 may include electronic networked venues 110, other networked venues200, and OMS/EMS/SOR markets 160, and may provide input data to the CMVproducer processor 230. The input data may include visible market data(e.g. QMDF) from networked venues 110, visible market data (e.g. backupdata) from other networked venues 200, and drop copies (e.g. DCF) fromOMS/EMS/SOR 160.

The CMV platform and components thereof (e.g. an aggregation engine 190)may be configured with control logic for interfacing with input datasources 220 to receive electromagnetic signals defining data setsrepresenting market data for one or more financial interests. CMVplatform includes a persistent data store (e.g. data storage device) forstoring the market data and consolidated data as described herein.

The CMV producer processor 230 may include control logic to configurevarious modules including feed handlers 232 for receiving input datafrom input data sources 220 and for providing data to alignment buffer236 and consolidated book 238. The feed handlers 232 may providebuffered data to alignment buffer 236 and pass through data toconsolidated book 238.

An administrative interface 234 may monitor and configure feed handlers232 and alignment buffer 236. The administrative interface 234 maytransmit and receive monitor and configuration signals to and fromadministrative and operations system 242.

A feed consumer system 240 may receive the consolidated view feed fromconsolidated book 238.

The CMV 230 consolidation process may implement various computer acts.For example, in “pass-through” mode (e.g. FIG. 7B), the CMV 230 may passthe individual feeds' events as they are received to the logic 238 whichmaintains the consolidated book consisting of orders/price levelssupplied by each feed. This may be a feed aggregation approach.

In “buffered” mode (e.g. FIG. 7B), the CMV 230 may add incoming eventsto a aggregation/alignment buffer 236 (e.g. a hold-hack queue) whicheffectively “ages” the events before releasing them to the logic whichmaintains the consolidated book. The purpose of aging the events is toreduce the “alignment error” between the feeds. In this scope, alignmenterror may be defined cross-feed time differences between the time ofreceipt of an event and the actual (theoretical) global timestamp atwhich the event occurred. Since the “true” theoretical time cannot beactually calculated across multiple data streams, the determination ofhow long to hold back each event depends on the combination of factorswhich attempt to indirectly approximate this error. Simple fixed latencyoffsets, may be applied individually to each feed. CMV producer 230 mayuse offsets when the average latency of a given feed is known. This maybe calculated based on historical data. Additionally, CMV producer 230may use different values for different parts of the day from apre-configured schedule.

Dynamic latency offsets may be used by CMV producer 230 when the averagelatency of a given feed varies throughout the day. A movingaverage/rolling window based calculation may be used by CMV producer230. This technique may be combined with the fixed latency offsets (byusing the fixed offsets as min/max caps, for example) to provide bettercorrections.

Anchor point based offsets may be used by CMV producer 230 when twoevents from different streams may be correlated using a pre-defined key(or set of keys), e.g. an order ID from the drop copy feed and a visibledata feed, then the relative timestamp offset between the two feeds maybe used to determine the absolute offset for the less dense data feed.Statistically, the average latency measurement from a dense visible datafeed may be more accurate that a low traffic drop copy feed. Bycorrelating the drop copy events to the visible data feed, CMV producer230 may approximate the latency offset for the drop copy with betterdegree of accuracy than just using the drop copy feed by itself, forexample.

FIG. 7H illustrates a flow chart diagram of a method 260 for generatinga consolidated view feed. At 262, the CMV processor 239 collects (viafeed handlers 232) market data from electronic order books, markets andvenues, and drop copy OMS/EMS data from

dealer processers 300 (e.g. input data sources 220). At 266, the CMVprocessor 239 receives a market data display request, where the requestincludes a user identifier. At 268, the CMV processor 239 generates aconsolidated view of market data specific to the requesting userspecific (based on the user identifier). The consolidated market data isspecific to the individual user, and may relate to the user's tradingbook, portfolio and so on.

FIGS. 7C and 7D demonstrate deployment views for the CMV platform.

FIG. 7C illustrates a networked venue deployment for the CMV platformincluding an exchange site 244, client site 246, and external datasources 252. The exchange site 244 and components thereof may beconfigured with control logic for interfacing with external data sources252 to receive electromagnetic signals defining data sets representingmarket data (or trading data) for one or more financial interests.Market data may be referred to herein to include data relating totrading financial interests by various market participants. Market datamay be referred to herein as trading data. The exchange site 244includes a persistent data store (e.g. data storage device) for storingthe market data, and networked venues 110 (e.g. lit book 116, hybridbook 114). The exchange site 244 includes a processor configured withcontrol logic to provide an internal messaging bus 248, CMV producer 230and an administrator/operations module 250. The CMV producer transmits aconsolidated view feed to feed consumer module 252 at client site 246.The client site 246 and components thereof may be configured withcontrol logic for interfacing with exchange site 244 to receiveelectromagnetic signals defining data sets representing consolidatedview feeds.

FIG. 7D illustrates a networked venue deployment for the CMV platformincluding an exchange site 244, client site 246, and external datasources 252. The client site 246 and components thereof may beconfigured with control logic for interfacing with external data sources252 to receive electromagnetic signals defining data sets representingmarket data for one or more financial interests. The client site 246includes a persistent data store (e.g. data storage device) for storingthe market data. The client site 246 includes a processor configuredwith control logic to provide a CMV producer 230 and a feed consumermodule 252. The CMV producer transmits a consolidated view feed to feedconsumer module 252 at client site 246. The client site 246 andcomponents thereof may be configured with control logic for interfacingwith exchange site 244 to receive electromagnetic signals defining datasets representing consolidated view feeds. The exchange site 244includes a processor configured with control logic to provide anadministrator/operations module 250. The exchange site 244 includes apersistent data store (e.g. data storage device) for storing electronicnetworked venues 110 (e.g. lit book 116, hybrid book 114).

FIGS. 7E, 7F, and 7G illustrate example interfaces at client site 246for providing display of consolidated view feeds. FIG. 7E illustrates anexample interface displaying consolidated view feeds by market level.FIG. 7F illustrates an example interface displaying consolidated viewfeeds by order. FIG. 7G illustrates an example interface displayingconsolidated view feeds by combined market level and order. These areillustrative example interfaces and other interfaces may be used todisplay consolidated view feeds.

Matching Priorities

As described above, the various networked venues 110, including darkhook(s) 112, hybrid book(s) 114, lit book(s) 116, and/or crossingbook(s) 118, can use any of a number of matching priorities, or types ofmatching priorities, in processing transactions, and may apply thepriorities in any desired order(s). Among the various improvementsoffered by systems and methods according to embodiments described hereinis the application of new matching priorities in matching bids, offers,etc., and completing transactions. An example new matching priority maybe referred to herein as “size-time” matching.

Different types of networked venues (e.g. dark book(s) 112, lit books116, hybrid book(s) 114, and/or crossing book(s) 118) may use the sameor different matching priorities. For example matching priorities may beprice, broker preferencing, market maker identity, and time at which aproposed transaction was posted. As another example, for dark book(s)112 and hybrid book(s) 114 the matching priorities may be price, brokerpreference, market maker, size/time. As a further example, for lit books116, the matching priorities may be price, broker preference, marketmaker, specified market participant (e.g. traditional, retail,institutional, non-SME, non-HFT), and time. These are illustrativeexamples only and other matching priorities may be used.

Referring now to FIGS. 8 to 17, various embodiments involving matchingpriorities implemented by a matching engine will be described. FIGS. 8to 11 illustrate systems for automated trading of financial interests onelectronic trading systems.

The system may be referred to herein as a transaction order processorsystem 320 which may be similar to the transaction data processor 100described herein.

Transaction order processor system 320 may include one or more computingdevices operable by users to access remote network resources. Thecomputing devices may be the same or different types of devices. Thecomputing device may be implemented using one or more processors and oneor more data storage devices configured with database(s) or filesystem(s), or using multiple devices or groups of storage devicesdistributed over a wide geographic area and connected via a network(which may be referred to as “cloud computing”).

Transaction order processor system 320 may reside on one or morenetworked computing devices, such as a personal computer, workstation,server, portable computer, mobile device, personal digital assistant,laptop, tablet, smart phone, WAP phone, an interactive television, videodisplay terminals, gaming consoles, electronic reading device, andportable electronic devices or a combination of these.

Transaction order processor system 320 may include any type ofprocessor, such as, for example, any type of general-purposemicroprocessor or microcontroller, a digital signal processing (DSP)processor, an integrated circuit, a field programmable gate array(FPGA), a reconfigurable processor, a programmable read-only memory(PROM), or any combination thereof. Transaction order processor system320 may include any type of computer memory that is located eitherinternally or externally such as, for example, random-access memory(RAM), read-only memory (ROM), compact disc read-only memory (CDROM),electro-optical memory, magneto-optical memory, erasable programmableread-only memory (EPROM), and electrically-erasable programmableread-only memory (EEPROM), Ferroelectric RAM (FRAM) or the like.

Transaction order processor system 320 may include one or more inputdevices, such as a keyboard, mouse, camera, touch screen and amicrophone, and may also include one or more output devices such as adisplay screen and a speaker. Transaction order processor system 320 hasnetwork interfaces in order to enable communication between systemcomponents, to access and connect to network resources, to serve anapplication and other applications, and to perform other computingapplications by connecting to a network (or multiple networks) capableof carrying data including the Internet, Ethernet, plain old telephoneservice (POTS) line, public switch telephone network (PSTN), integratedservices digital network (ISDN), digital subscriber line (DSL), coaxialcable, fiber optics, satellite, mobile, wireless (e.g. Wi-Fi, WiMAX),SS7 signaling network, fixed line, local area network, wide areanetwork, and others, including any combination of these. There may bemore transaction order processor systems 320 distributed over ageographic area and connected via a network. Transaction order processorsystem 320 is operable to register and authenticate users (using alogin, unique identifier, and password for example) prior to providingaccess to applications, a local network, network resources, othernetworks and network security devices. Transaction order processorsystem 320 may be different types of devices and may serve one user ormultiple users.

The transaction order processor system 320 is configured with controllogic for interfacing with market participant processor(s) 300 toreceive electromagnetic signals defining data sets representing proposedorder requests to execute transactions in one or more financialinterests. The proposed order requests include proposed buy orderrequests and sell order requests.

The transaction order processor system 320 includes a persistent datastore 352 (e.g. data storage device) for storing the proposed orderrequests, along with rankings, matched results, and matching factors asdescribed herein. The transaction order processor system 320 includes amatching engine 350 for matching one or more buy orders to one or moresell orders according to matching factors as described herein. Thematching factors are used to rank and match buy orders to sell order ina manner that may achieve fairness, and other advantages as describedherein. The orders may be ranked according to different matchingfactors, which may be aggregated to generate a total rank. The differentrankings for different matching factors may be weighted different usingnon-zero coefficients so that one matching factor has greater weightthan another matching factor. The matching engine 350 may be integral toor external to venues, electronic networked venue processors 110, othernetworked venue processors 200, electronic clearing house, or otherelectronic transaction execution hardware components.

The transaction order processor system 320 is configured to executetransactions based on the buy orders matched to the sell orders usingnetworked venue processors 110, other networked venue processors 200,electronic clearing house, or other electronic transaction executionhardware components. Transaction order processor system 320 may alsoinclude market data processors 322, 222.

As shown in FIGS. 9 and 11, transaction order processor system 320 mayalso include a pre-filterer 354 for pre-filtering the proposed orderrequests prior to the matching by the matching engine 350. Variouspre-filtering techniques may be used, as described herein. For example,the pre-filterer 354 may be configured to pre-filter by matching a buyorder to a sell order when the buy order fully fills the sell order.This approach may attempt to reduce transaction processing costs andtrading fees by recognizing that multiple trades requires more work by aclearing house, and increased costs. For example, one large trade mayprovide cost savings over multiple smaller trades. Accordingly, onepre-filter may be a size based threshold. If an incoming order can fullymatch with an order then this may take priority over ranking mechanism.Reduction in the number of trades may reduce trading fees. Otherpre-filtering mechanisms include order size, a user type, an order type,and other attributes as described herein. The pro-falterer 354 maydecrease fragmentation of orders when filling.

Pre-filterer 354 may be used to implement restrictions on trading. Therestrictions may be based on a number of different attributes as notedherein. For example, an attribute restriction may be market participanttype or specified market participant (e.g. retail, institutional, a SME,a HFT, a non-HFT, and a non-SME). This enables the pool of proposedorders to be processed by matching engine 350 to be limited.Pre-filterer 354 may be used at multiple iterations, and there may bedifferent levels of pre-filtering. For example, a first pre-filter maybe applied to reduce or aggregate the pool of proposed order requests,and then another pre-filter may be applied to the already reduced orselected pool of proposed order requests. Examples include a firstpre-filter at a price level, and then a second pre-filter based on ordersize. The pre-filterer 354 may apply to different pools or groups (e.g.grouped at different price levels) and performed iteratively for eachgroup. Groups as used herein may refer to aggregate pools of orderrequests, sets of order requests, collections of order requests, and soon.

As shown in FIGS. 10 and 11, the transaction order processor system 320may also include a segregator 356 for segregating the proposed orderrequests into groups or pools. Example segregation models include pricelevel, order type, order attribute, order size, user type, specifiedmarket participant (SME v. non-SME, retail v. non-retail), userattribute, and order origination. The matching engine 350 is operable toperform the matching on a per group basis or across groups. Thesegregating may be iterative and implemented in levels. For example, thepool of proposed order requests may be grouped by price level and then,for each price level, further grouped by another attribute such as usertype. The segregation may be used to implement restrictions, such asuser type.

FIGS. 12 to 15 illustrate example flow chart diagrams of methods 400 forautomated trading of financial interests on electronic trading systems.

At 402, transaction order processor 320 receives from market participantprocessor(s) 300 electromagnetic signals defining data sets representingproposed order requests to execute transactions in one or more financialinterests. The proposed order requests may be received via SOR 150. Theproposed order requests include proposed buy order requests and sellorder requests.

The proposed order requests may be associated with one or moreattributes such as order time, sequence identifier, price level, ordertype, order attribute, order size, filled amount, remaining size,various matching factor ranks, total rank, trades, and orderorigination.

In accordance with some embodiments, each proposed order request may beassociated with an attribute defining an order time. The order time maybe rounded to a predetermined increment. The order time may be atimestamp for an original time of order entry.

In accordance with some embodiments, each proposed order request may beassociated with a composite identifier as an attribute. The compositeidentifier may include a physical time (e.g. assigned by a physicalclock) such as an order time (e.g. timestamp) and a sequence identifierwhich may be a logical time.

At 404, transaction order processor 320 stores the proposed orderrequests in a persistent data store 352. Various other components oftransaction order processor 320 may access the persistent data store 352to read data, process data, update data, and so on.

In some embodiments, at 405 a, pre-filterer 354 pre-filters the proposedorder requests. Each proposed order request may be associated with anorder size (e.g. a number of units of a particular financial interest).For example, a proposed sell order may be associated with an attributedefining a size or quantity of financial interests that a dealerproposes to sell. A proposed buy order may be associated with a size orquantity of financial interests that a market participant proposes tobuy. The pre-filterer 354 may be configured with control logic topre-filter by matching a buy order to a sell order when the buy orderfully fills the sell order. For example, a buy order that fully fills asell order may be matched to the sell order over a buy order that onlypartially fills the sell order. This may reduce the transaction fees byattempting to decrease the number of trades required to complete or fillan order. A proposed order request may be associated with a variety ofattributes including an order time, an order size, a user type, a pricelevel, an order type, and so on. Other attributes or parameters arereferred to herein. The pre-filterer 354 may be configured with controllogic to pre-filter based on one or more attributes.

In some embodiments, at 405 b, segregator 356 may be configured withcontrol logic to pre-process the proposed order requests by segregatingthe plurality of proposed order requests into groups. Matching engine350 may be configured to perform matching on a per group basis. Thesegregator 356 may be configured with control logic to group theproposed order requests based on a variety of attributes. For example,segregator 356 may be configured with control logic to group theproposed order requests based on price level, order type (e.g. buy,sell), order attribute, order size, order origination and so on. Otherattributes are referred to herein.

At 406, the matching engine 350 matches one or more buy orders to one ormore sell orders according to matching factors. As noted, this may beperformed on a per group basis if the pool of proposed order requests issegregated.

The matching may be implemented by ranking the proposed orders based ontheir associated attributes according to a variety of matching factors.Each matching factor may generate a different ranking for a particularproposed order request. The different rankings may be aggregated togenerate a total ranking for the particular proposed order request. Theaggregation may be based on a weighting for different matching factors,where each matching factor is associated with a non-zero coefficientweighting.

In accordance with some embodiments, the matching engine 350 may beconfigured with control logic to implement size-time matching usingthree matching factors. The three matching factors may include apriority time, a sequence identifier, a last order event, a remainingunexecuted order size, and other attributes.

The priority time may relate to the time of entry of the order or thetime of an update to the order. The priority time may be an attributeassociated with the proposed order request, and a priority time may bedefined by a sequence identifier. The sequence identifier may begenerated as a logical timestamp such that a proposed order request madeor changed before a current proposed order request receives an earlieror lower sequence identifier, and a proposed order request made orchanged after a current proposed order request receives a later orhigher sequence identifier. The sequence identifier may be unique foreach proposed order request (e.g. strictly ascending or descending). Thesequence identifier provides a mechanism to sort and rank the proposedorder requests based on a logical timestamp (as compared to a physicaltimestamp that may be assigned using a time clock). The sequenceidentifier may be assigned to a proposed order at the time of entry whenan order size and a price level is defined for an order. The sequenceidentifier may be reset for the proposed order when the order sizechanges or the price level changes. That is, an update to price orvolume may trigger a new sequence identifier, or reset the sequenceidentifier.

The last order event may relate to a full fill of the proposed orderrequest, a partial fill of the proposed order request, a change of ordersize of the proposed order request, a change of price level of theproposed order request, and so on.

In accordance with some embodiments, the matching factors may beassociated with a non-zero coefficient weighting. The non-zerocoefficient weighting may be used to aggregate the different rankingsfor different matching factors to generate a total ranking. The totalranking may be used to match the proposed buy order requests to theproposed sell order requests in order to fill orders and executetransactions.

At 408, transaction order processor 320 executes transactions based onthe buy orders matched to the sell orders. Executing transactions mayresult in the filling of buy and sell order requests.

Matching engine 350 may be configured with control logic to implementmatching according to various matching techniques. Continuous ordermatching may refer to the process for executing trades by matching buyorders with sell orders.

An example of matching technique may be price/time. When an order isentered into a book it may be assigned a timestamp. The timestampassigned may be used to prioritize all orders in the book at the sameprice level (e.g. the order entered the earliest will be executedfirst). Note that an order may not necessarily be traded at a singleprice (level) but may generate multiple partial trades at differentprice levels. When an order trades against all available volume at agiven price level, the next best price level may become best and theearliest submitted order at that price level may get priority. Note thata variant of price/time includes size then time whereby orders with thelargest equal volumes (at a given price level) are matched first basedon timestamp sequence.

Another example of a matching technique is Pro Rata. When matchingorders in the book against an inbound order, all resting orders (at theprice level) may be taken into account based on a percentage of theoverall volume (at that price level) regardless of its timestamp. Theinbound order may then match against a portion of all eligible restingorders. Note that this methodology is commonly applied between aspecific set of order originator types (ex. market maker order vs.non-market maker orders).

FIG. 16 illustrates an example of order book matched under a price/timescenario and a Pro Rata scenario. The originating order book 502 ismatched under a price/time scenario to generate a resulting order book504 after order execution. The originating order book 502 may also bematched under a Pro Rata scenario to generate another resulting orderbook 506.

Price/time and Pro Rata matching methodologies may be combined. Forexample, a Pro Rata matching logic may be applied first and in the eventtwo orders have the same resulting Pro Rata allocation (which wouldresult in the complete fill of the inbound order) then preference isapplied to the order which had been submitted to the book first.

Pro Rata allocation may include restrictions. For example, restrictionsmay include minimum order size restrictions applied to orders which areconsidered for Pro Rata allocations (primarily utilized to reduce thenumber of partial fills).

User type or other attributes may also be used by matchingmethodologies. For example, within the noted matching implementationsthere may also be a concept of user type priority matching, whereby aspecific user type is given matching priority above all other similarorders. For example, in a Canadian marketplace similar orders may bematched based on broker preference (e.g. trading rules set by particularvenue). At the same price level, orders submitted by the same broker(i.e. the originating broker on a buy order and sell order are the same)may be matched first (e.g. broker preference); followed by ordersoriginating from the designated market maker (for the symbol beingtraded) (e.g. market maker preference); followed by all other availableorders using either the Pro Rata or price/time methodologies, othermatching techniques (or combination of). Note embodiments describedherein may also support an additional broker preference technique,specified market participant, where an order with a specific regulatorymarker assigned thereto or associated with a specific user type ortrading behavior, and may be matched ahead of orders (at the same pricelevel) which do not have the specified market participant marker.

Size/Time Priority

Another example matching technique may be referred to as size-timeweighting. The size-time weighting technique may involve ranking ordersusing at least three different matching factors, as described herein.That is, the ranking may be based on three dimensions of an order. Eachdimension may relate to different attributes of an order, or marketparticipant (e.g. user) associated with the order. Example dimensionsinclude priority time, sequence identifier, last order event, remainingunexecuted order size, and so on. Additional dimensions may be referredto herein. Each dimension may be associated with a different weighting.Different factors will result in different rankings or sortings for theorders. The different rankings or sorts will be aggregate to generate atotal rank or score for the order. Matching of buy orders to sell ordersmay be based on the total rank.

Among the advantages offered by size-time weighting in accordance withthe embodiments described herein is the ability to fairly arbitratebetween important aspects of an order's characteristics in, for example,a central limit order book. For example, data representing price andother attributes (e.g. order terms, considerations) associated with aproposed transaction or order (e.g. broker identity and/orcharacteristic(s) of a broker) can be used to determine matchingpriority(ies) in such order books. The matching engine 350 may beconfigured to implement a variety of matching priorities depending onthe type of book, or other attributes. Attributes may relate to an order(e.g. order attributes) or attributes may relate to the marketparticipant associated with the order (e.g. user attributes, marketparticipant attributes). For example, a type of market participant (e.g.retail, institutional investor) may be a user attribute or a marketparticipant attribute).

In accordance with some embodiments, the matching engine(s) 350 may useabsolute order timestamps (or sequence IDs by proxy) to further refinematching priority. For example, Pro Rata allocations can be applied inorder to fairly allocate fills. However, in various circumstances eachof these criteria may suffer deficiencies—in the case of time, forexample, issues pertaining to perceived fairness can arise among marketparticipants. Moreover, Pro Rata allocations by their nature involvetrade fragmentation, which in some circumstances may be viewed as anundesirable result.

In order to address such issues, size-time priorities in accordance withembodiments described herein may be applied by suitably-configurednetworked venue processor(s), such as execution engines, matchingengines 350, and other processors associated with any or all ofnetworked venue(s) 110. Upon receipt of incoming order data, such venueprocessor(s) or matching engines 350 can determine the size ofcorresponding volume terms (or remaining, unfilled size, should othermatching considerations, such as broker identity have been appliedpreviously, and some of the order thereby filled). Optionally, asidefrom any other considerations, the pool of orders may be segregated byvarious segregation models and attributes for the orders. For example,all single orders residing in an order book at each price level mayfirst be segregated and considered eligible for priority matching withthe incoming order. Assuming no such orders exist, the entire populationof orders at each price level may be considered, and a weighted scoringmechanism applied. Other segregation models may be based upon ordertype, order size, order originator type, and other attributes.

In accordance with some embodiments, the pool of orders may bepre-filtered based on various attributes. For example, the pool oforders may be pre-filtered based on order size to match buy orders andsell orders that are fully filled. This may reduce the number of tradesrequired to fill orders which may in turn reduce transaction and tradefees.

By way of illustrative example, a three matching factor scoringmechanism can, for example, consider:

-   -   Priority Time (e.g. Original Order Time of Entry, sequence        identifier, and other measure of logical time or physical time):        this may reward, for example, ongoing commitment of        partially-filled orders. Changes to orders may reset the        Priority Time (e.g. price level changes, volume increase);    -   Sequence Identifier;    -   Last Order Event (e.g. last fill time, last change of volume,        last change of price, and so on): this may reward, for example,        time commitment while adjusting appropriately for recent fills        or other activity;    -   Remaining Unexecuted Order Size (to reward, for example, larger        resting orders).

Applying each of such factors to different orders can, for example,generate a ranking of the orders on an integer scale from 1 to N (with Nbeing the population count and equal factors rounded down on the rankscale to the first factor with that rank with population countcontinuing). The ranking by each factor may be aggregated to generate atotal ranking for the orders. Aggregation may use non-zero coefficientweightings for each factor.

Different changes to orders may be considered an order event only, orboth an order event and a change to trigger a reset to the prioritytime. For example, a decrease in an order size may trigger a reset ofthe priority time (e.g., as a deterrent to encourage increases inorders) and may also be viewed as an event. As another example, anincrease in an order size may not trigger a reset of the priority time(e.g., to encourage increased available tradable volume) but may beviewed as an event. As an example, consider three orders of size 900,900 and 1,000. Here the rank applied would be 1, 1, 3 with the firsttwo, having the same size, being rewarded the same rank and 3 being thepopulation count. As such, ranking would be ascending based on size.These rankings for order size may be aggregated with other rankings forother factors to generate total or aggregate ranks for the orders.

FIGS. 17A, 17B, and 17C illustrates an example of order book matchedunder a size-time weighted scenario. The originating order list 702 a,704 a, 706 a is matched under a size-time weighted scenario to generatea resulting order list 702 b, 704 b, 706 b. The originating order list702 a, 704 a, 706 a may be matched under a size-time weighted usingequal weights (as shown in FIG. 17A), or different weights (as shown inFIGS. 17B, 17C) to generate other resulting order list 704 b, 706 b. Inparticular, FIG. 17B shows a greater weight applied to the Time of LastEvent factor. FIG. 17C shows a greater weight applied to the Order SizeFactor. A pre-filter may also be applied by price level to generatedifferent groupings. These are example weights (e.g. ⅙, ⅔, ½, ¼, 2, ⅓),factors, and values for illustrative purposes. Example order attributesinclude, but are not limited to, sequence identifier, time of entry,time of entry/last fill, original order size, quantity filled, remainingsize, size rank, time/last fill rank, time commitment rank, total rank,and trades. These attributes may be referred to as different dimensionsof the order. The order list may be defined within an order book, forexample. Optionally, to improve fairness, timestamps can be determinedand ranked, based upon lower time resolutions to address the typical“first past the post” problems associated with absolute time or sequenceID ranking. The timestamp rounding may be performed using variouspredetermined increments configured per venue (e.g. second, millisecond,and or other). To address temporal logic issues time rounding would bedown to the opening timestamp of each window. For example, consider thefollowing:

-   -   10:00:00.001151    -   10:00:00.001562    -   10:00:00.001671    -   10:00:00.002171    -   10:00:00.002341    -   10:00:00.003421

With the associated timestamps at the microsecond level of resolution, anetworked venue 110 which rounds to the millisecond could treat thepreceding six timestamps as:

-   -   10:00:00.001    -   10:00:00.001    -   10:00:00.001    -   10:00:00.002    -   10:00:00.002    -   10:00:00.003

As a result, the orders would be ranked as:

4, 4, 4, 2, 2, 1

Note that assigned rankings descend, based on passage of incrementaltime. These rankings may be aggregated with the rankings for the sizefactor, or other factor to generate a total ranking for the order.

Rank scales can subsequently be resealed by one or more multipliers, asdesired. The multipliers may be referred to as non-zero coefficients toweight different factors. For example, the N=6 count above could beresealed by a factor of 6/4 times each integer, in order to conditionthe rank score impact on subsequent matching rounds.

Orders may then be allocated scores or total ranks in accordance withthe three individual factors, and a priority of matching for incomingorders can be determined based upon a coefficient-weighted total score(optionally, but not necessarily, equaling 100%) of the three factors ormore factors.

Ties might be broken, for example, only where final weighted scores areequal, and might use any appropriate factor, including for example aserially-assigned sequence 10, financial interest type, listing venue,financial interest price, currency, or other preferred attribute. Asequence number or identifier may provide a tie breaker as a sequenceidentifier may be a unique value that may be strictly increasing ordecreasing. The sequence identifier may act as a logical time (asopposed to physical time). The priority time of the matching prioritymay be expressed as logical time, such as a sequence identifier or othertime/event identifier.

Among other advantages such priority schemes enable periodic and/orreal-time reporting and adjustments, so that, for example, inappropriateor otherwise undesired “gaming” of networked venue rules may becountered, and/or to otherwise optimize desired results. Prioritiesaccording to this aspect of embodiments described herein may further beapplied on a financial interest-specific basis.

Among other benefits, size-time priorities in accordance with thisaspect of the embodiments described herein may address some of thetypical problems associated with either time-based or Pro Rata basedpriority logic. For example, by filtering single orders able to fill thefull size (or remainder) of incoming orders, this logic naturallyaddresses trade execution fragmentation. Further, use of a weightedscoring system can help to address issues typically associated withfairness, priority gaming, size dominance and trade fragmentation.Partially-filled orders using this methodology are naturally lowered inscore (and thus priority) on subsequent matching events based upon beingassigned a lower rank-based score on 2 (e.g., Last Order Event) insubsequent matching events. Assuming optimal factor weights, this shouldlead to amore equitable rotation of order priority.

Accordingly, the matching priority may evaluate orders and marketparticipants based on different matching factors or criteria. This mayprovide a fair mechanism to match buyers and sellers. To only considertime when matching orders may give rise to fairness issues. Participantswho react quickly may get ahead of other participants (e.g. retailinvestors). Time may be a technical factor relating to arbitrary orderevaluations based on system performance. For example, a network line orsystem delays may cause latency which may have large impact on timebased processing. A millisecond delay may have a large impact. Further,transaction systems may prefer certain participants and configurematching priorities accordingly.

Segmentation

Known approaches to trading may result in issues and challenges fordifferent groups of market participants.

Known approaches to trading may be subjective in nature and as a resultmay be applied in an inconsistent manner. This may result in lack ofproduct availability to a market participant. In addition, thesubjective nature does not consistently provide the same benefits orprotections which flow segmentation in accordance with embodimentsdescribed herein aims to provide. Embodiments described herein mayrebalance trading opportunities.

Embodiments described herein may implement a segmentation technique tofacilitate the automated identification of specific trading strategies(e.g. where order generation and entry is fully automated and in normalcourse the originator does not have, at the end of each trading day,more than a nominal position) or behaviors (e.g. rapid order insertimmediately followed by an order cancellation) in real-time. Thissegmentation technique may result in the systematic acceptance orrejection of an order flow from entering into, taking liquidity from, orproviding liquidity to a specified networked venue 110 (e.g. dark hook112, hybrid book 114, lit book 116, crossing book 118). Trading strategyor behavior identification can be completed on an order by order basisor a group of orders based on a single, all or a set of definedparameters.

The segmentation technique can be configured to use one, all or acombination of the below defined parameters for purposes of strategy orbehavior identification for an order or group of orders which is to besegmented and subject to specified treatment. A user may refer to amarket participant. Example parameters include but are not limited to:

-   -   Market Participant identifier: a unique venue assigned        identifier assigned to each eligible market participant 300 and        associated with each order submitted by the respective market        participant 300 via SOR 150.    -   Order Entry Message Tag/field: a defined tag which may be        provided on the submission of each order to the networked venue        (may or may not be received via the SOR 150 or direct). This        tag/field may be a regulatory or non-regulator marker. This        tag/field may be currently existing or newly created by the        networked venue.    -   Order Entry Tag Value: a defined value which must be either        present or absent is a specific tag on the submission of each        order to the networked venue.    -   Order Type: a networked venue defined order type available for        submission (e.g. Limit, Market, National Best).    -   Order Attribute: system or networked venue defined attribute        (existing or new) of an order submitted to the networked venue        (e.g. iceberg, stop).    -   Order to Trade Ratio: number of orders originating from the same        trader identifier prior to an order (submitted by the identified        Market Participant Identifier) participation in a trade (i.e.        number of orders submitted to generate one trade).    -   Client or agency attributes (e.g. user attributes).    -   Cancellation to trade ratio: number of cancelled orders        originating from the same trader identifier prior to an order        (submitted by the identified Market Participant Identifier)        participation in a trade (i.e. number of orders cancelled to        generate one trade).

Referring now to FIG. 18 there is shown a transaction order processorsystem 320 including a segmentation processor 370. The segmentationprocessor 370 may be implemented using one or more computing devicesoperable to access remote network resources. The computing devices maybe the same or different types of devices. The computing device may beimplemented using one or more processors and one or more data storagedevices configured with database(s) or file system(s), or using multipledevices or groups of storage devices distributed over a wide geographicarea and connected via a network (which may be referred to as “cloudcomputing”).

The segmentation processor 370 may reside on one or more networkedcomputing devices, such as a personal computer, workstation, server,portable computer, mobile device, personal digital assistant, laptop,tablet, smart phone, WAP phone, an interactive television, video displayterminals, gaming consoles, electronic reading device, and portableelectronic devices or a combination of these.

The segmentation processor 370 may include any type of processor, suchas, for example, any type of general-purpose microprocessor ormicrocontroller, a digital signal processing (DSP) processor, anintegrated circuit, a field programmable gate array (FPGA),reconfigurable processor, a programmable read-only memory (PROM), or anycombination thereof. The segmentation processor 370 may include any typeof computer memory that is located either internally or externally suchas, for example, random-access memory (RAM), read-only memory (ROM),compact disc read-only memory (CDROM), electro-optical memory,magneto-optical memory, erasable programmable read-only memory (EPROM),and electrically-erasable programmable read-only memory (EEPROM),Ferroelectric RAM (FRAM) or the like.

The segmentation processor 370 may include one or more input devices,such as a keyboard, mouse, camera, touch screen and a microphone, andmay also include one or more output devices such as a display screen anda speaker. The segmentation processor 370 has network interfaces inorder to enable communication between system components, to access andconnect to network resources, to serve an application and otherapplications, and to perform other computing applications by connectingto a network (or multiple networks) capable of carrying data includingthe Internet, Ethernet, plain old telephone service (POTS) line, publicswitch telephone network (PSTN), integrated services digital network(ISDN), digital subscriber line (DSL), coaxial cable, fiber optics,satellite, mobile, wireless (e.g. Wi-Fi, WiMAX), SS7 signaling network,fixed line, local area network, wide area network, and others, includingany combination of these. There may be more segmentation processors 370distributed over a geographic area and connected via a network. Thesegmentation processor 370 is operable to register and authenticateusers (using a login, unique identifier, and password for example) priorto providing access to applications, a local network, network resources,other networks and network security devices. The segmentation processor370 may be different types of devices and may serve one user or multipleusers.

The segmentation processor 370 is configured with control logic forinterfacing with market participant processor(s) 300 to receiveelectromagnetic signals defining data sets representing proposed orderrequests to execute transactions in one or more financial interests. Thesegmentation processor 370 is configured with control logic to processthe order requests to automatically approve or deny the order requestsprior to submitting the requests to electronic networked venues 110.

The segmentation processor 370 connects with or integrates a persistentdata store 352 (e.g. data storage device) for storing the proposed orderrequests, along with attributes and parameters relating to the orders,and segmentation tables, as described herein. The segmentation processor370 uses the segmentation tables to automatically direct, aggregate,approve or deny orders prior to submission to electronic networkedvenues 110.

The segmentation processor 370 may be configured with control logic toautomatically apply the segmentation technique in a consistent andrepeatable manner across one, all or a subset of exchange order books.

The segmentation processor 370 may provide a variety of services. Forexample, the segmentation processor 370 may provide the ability toprotect market participants from predatory or other strategics that maydisadvantage them. The segmentation technique may provide consistent andquantifiable approach to monitor and manage usage via the use ofspecific parameter(s) to direct, aggregate, approve or reject an orderfrom entering a networked venue 110. The segmentation processor 370 mayprovide elimination of subjectivity for approval and rejection oforders. These are non-limiting examples.

FIG. 19 illustrates an example method 800 implemented by segmentationprocessor 370 to approve or deny order requests.

Generally, at 802, segmentation processor 370 receives one or more orderrequests associated with parameters or attributes. At 804, the orderrequests may be stored via persistent data store 352. At 806,segmentation processor 370 determines whether the order(s) should besubmitted to electronic networked trading venues 110. For example,segmentation processor 370 may check the attributes against segmentationtables stored in persistent data store 352 to determine whether theorder(s) should be submitted to electronic hooks, networked tradingvenues, or markets 110. At 808, segmentation processor 370 may reject ordisallow the order(s) from being submitted to electronic books,networked trading venues, or markets 110. At 810, segmentation processor370 may approve or allow the order(s) to be submitted to electronicnetworked venues 110. The segmentation processor 370 may then submit theapproved orders to electronic networked venues 110 to executetransactions at 812.

FIG. 20 illustrates an example of potential segmentation table by traderidentifier which may govern order acceptance as active or passive withineach order book.

FIG. 21 illustrates example parameters as tags and tag values fordifferent order books. The chart identifies an example of a table thatmay be used where a specific tag and value (within the tag) is presentfor order acceptance validation purposes. For example, if Tag 7729 (e.g.SME regulatory marker) is present on an order then the value provided inthe field may need to be equal to “0” otherwise the order may berejected by the system.

As an illustrative and non-limiting example of segmentation processing,consider an order submitted, via market participant system 300, bymarket participant ID (e.g. TraderID) ABC123 (01) to buy 100 shares ofZYZ at market price to a dark order book 112. That is, marketparticipant ABC is submitting an active order to purchase 100 shares ofZYZ to the dark order book 112.

The order and parameters thereof is received by the system 320 via SOR150 and immediately validated by the segmentation processor 370. Thatis, the segmentation processor 370 checks the order to determine if itcan be passed on to the order book, which in this example is dark orderbook 112.

For this example, segmentation processor 370 identifies marketparticipant ID ABC123 as allowed for active order submission to the darkorder book 114 using the segmentation table shown in FIG. 20.

The system rejects the order (01) back to market participant ABC123.

As another illustrative and non-limiting example of segmentationprocessing, consider an order submitted, via market participant system300, by market participant ID ABC123 (02) to buy 100 shares of ZYZ atmarket price to the lit order book 116. That is, market participant ABCis submitting an active order to purchase 100 shares of ZYZ to the litorder book.

The order is received by the system via SOR 150 and immediatelyvalidated by the segmentation processor 370. That is, segmentationprocessor 370 checks the order to determine if it can be passed on tothe order book, which in this example is lit order book 116.

For this example, market participant ID ABC123 is identified as allowedfor active order submission to the lit order book using the segmentationtable shown in FIG. 20.

The system accepts the order (02) and relays the order to the lit orderbook 116 for processing, As a further illustrative and non-limitingexample of segmentation processing, consider an order submitted, viamarket participant system 300, by market participant ID YYY554 (03) tobuy 100 shares of ZYZ at market price to the hybrid order book 114. Thatis, market participant YYY is submitting an active order to purchase 100shares of ZYZ to the hybrid order book 114.

The order is received by the system via SOIL 150 and immediatelyvalidated by the segmentation processor 370. That is, segmentationprocessor 370 checks the order to determine if it can be passed on tothe order book, which in this example is hybrid order book 114.

For this example, market participant ID YYY554 is identified asdisallowed for active order submission to the hybrid order book 114using the segmentation table shown in FIG. 20.

The system rejects the order (03) hack to market participant YYY554.

This is an illustrative example and additional factors may be used toevaluate whether a market participant may submit an order, such as forexample an order to trade ratio or cancellation to trade ratio.

Size-Up

In another aspect, embodiments described herein may offer a size-upoption that may be extended to participants in a variety of markets,including dark books or venue(s) 112, as shown for example in FIG. 2.Although the exemplary embodiment recites that size up is applied to adark order book, it is intended that a size up auction can beimplemented and made available within any order book or venue. Inaccordance with this aspect of embodiments described herein, aparticipant in such a market, as for example a dealer who has posted ahid or offer, can be provided, either in all cases, randomly, or uponthe occurrence of any desired trigger event, and/or at any suitablepoint in the trading process, whether it would like to considercommitting to trading any additional quantities of a specific financialinterest in which the trader has posted an order. In the event a traderindicates that it would be willing to consider such ‘sizing up’ ofexisting orders then such trader(s) may be provided with an opportunityto indicate a total volume he/she is willing to trade, and a maximumprice at which he/she is willing to trade such volume, such as a maximumprice differential with respect to NBBO and/or other bench mark, withinwhich the trader(s) would be willing to trade. One or more suitableauctions and/or matching processes may then be conducted at a suitabletime. In some embodiments, such sized-up trades occur at the midpoint ofNBBO, so as to allow for, or support, price movement between indicationsof interest, response, and execution. Size-up features may beimplemented in an automated way using control logic to generate andrespond to size-up requests.

Size-up requests may be generated by networked venue(s) 110, 112, etc.,and communicated to eligible market participants in any suitable manner,including for example preformatted text messages; responses can asmentioned include both maximum size-up volumes and desired price terms.Indications of interest or acceptance in such options can be binding,such that auctions or other transaction matchings may be conductedconclusively.

Size-up options in accordance with such aspect(s) of embodimentsdescribed herein offer a number of advantages. For example, in order toavoid intelligence gathering by market participants who are attemptingto influence or manipulate markets, ratios of expression of initialinterest to actual participation may be monitored, and marketparticipants who too frequently express interest but ultimately do notparticipate may be omitted from corresponding communications listsand/or otherwise barred from participation.

A size up auction allows participants to contribute more quantity to anorder book (e.g., dark book) by sending in new orders for a specificevent. These orders will have a duration only for the size up auctionfor which they were solicited. Participants have an option to set up asize up flag for resting orders to indicate that the participant isinterested in potentially sending further quantity through the sendingof a size up indication of interest (IOI) response order. The size upauctions can be conducted throughout the day at a set price (NBBO). Fora particular size up auction, every participant will execute at the sameprice (NBBO), but each participant may vary in their tolerance toexecute at that price and ability to qualify for the size up auction.

When a size up auction event is triggered, the system will determinewhether the size up auction will commence by first determining if thereis enough interest to solicit quantity. Once interest is determined, thesystem will: 1) solicit new orders by sending IOI messages to eligibleparticipants, 2) will take a snapshot of the current hook and, and 3)start an IOI response timer.

If enough valid IOI response orders are received within the specifiedthe time interval of the IOI response timer, the system will execute thesize up auction, matching the newly sent IOI response orders against thesnapshot of the book taken before sending the IOI orders. The IOIresponse orders will be added to the end of the time priority queue inthe snapshot book.

A size up call is a call auction completed within an order book (e.g.,dark book) at random points in time throughout the course of the regulartrading hours for that order book. For example, the size up auction maybe performed every 3 to 5 seconds from about 9:30 am to 5:00 pm. In theexemplary embodiment, participation is optional and restrictedexclusively to dark hook liquidity providers, though participation maybe limited to liquidity providers in any non-transparent order book,such as a hybrid book. Any liquidity providing order designated forparticipation in size up calls (by the liquidity providing orderoriginator) where the originally submitted order meets the minimumdollar value and volume threshold will be eligible to receive electronicnotification regarding participation in size up calls. Prior to a sizeup call occurrence, the exchange systems will identify eligibleliquidity providing orders. If eligible orders exist on both the bid andask side, each originating participant will be notified (electronically)of the opportunity to participate in a size up call. For the purposes ofthe size up call, the execution price of the mid-point call thattriggered the size up call is referred to as the “reference price.”

The execution price is the NBBO (national best bid or offer) at the timeof the trade. The NBBO is updated throughout the day to show the highestand lowest offers for a security among all exchanges and market makers.The lowest ask price and the highest bid price displayed in the NBBO donot have to come from the same exchange. Only transparent orders areused for determining the NBBO. The NBBO is the mid-point between a bestbid price and the best ask price, regardless of the volume associatedwith those prices.

A participant submits an order into the dark book, and the participantcan indicate a desire to participate in a size up auction. Thetransmitted order will include a specific price and a specific size, aswell as an indication to participate in the size up auction.

A market data gateway of a matching engine (also referred to herein as a“trading engine” or “trading engine processor”) associated with the darkbook transmits an IOI message to qualified participants. In order toqualify to receive the IOI message, the participant's order must satisfya threshold price and a threshold volume. If the participant is on thebuy side and the participant's order satisfies the threshold price andvolume and if there is an auction, then an IOI message is transmitted tothe participant. The IOI message is a notification that a size upauction will be conducted shortly. For example, the notification may betransmitted at 9:04:59 am that a size up auction is being conducted at9:05:00 am. In the exemplary embodiment, the notification provides onlyone second, though the IOI message is configurable and may provide anytime period in advance of the size up auction.

Within the time period, the participant must respond with an IOIresponse order indicating that the participant wants to participate andindicating a volume to trade. The originating participant may, withinthe specified time period following notification by the exchange, commitany amount of volume to the size up call. Additionally, when submittingcommitted volume for size up call participation, a price tolerance oneither side of the reference price within which the committed volume canexecute during the size up call (“price tolerance”) can be identified. Amaximum price may be provided because the participant does not know theNBBO at that time. Alternatively, the participant may choose not torespond, and as a result, the participant will not participate in thesize up auction.

The participant's computing device can automatically respond to the IOImessage. The market data gateway of the matching engine transmits theIOI message to the participant's computing device, and the participant'scomputing device may have rules or other logic for responding to the IOImessage, such as a maximum price, a volume, and whether the participantis interested in the size up auction. Once the IOI message is received,the participant's computing device automatically transmits an IOIresponse order to the matching engine based upon the rules. As a result,when the participant only has about one second to respond, theparticipant's computing device is configured to automatically respondwith an IOI response order that is compliant and within the specifiedtime period.

At the time of the auction, the matching engine obtains a NBBO value ofthe transparent marketplace. The matching engine can apply matchinglogic. For example, an order eligible to trade in the size up call willbe executed in the following sequence: (1) subject to market makervolume allocation; (a) against offsetting liquidity providing orders(designated for participation in dark mid-point calls) entered by thesame participant, according to the time priority of the offsettingorder, provided neither order is a jitney order; then (b) againstoffsetting liquidity providing orders (designated for participation indark mid-point calls) according to size-time priority; then (2) againstoffsetting committed volume entered by the same participant, accordingto the time priority of the committed volume, provided neither order isa jitney order; then (3) against offsetting committed volume accordingto size-time priority.

All committed volume that is not executed in the size up call iscancelled back (released to) the originating participant. The matchingengine will generate and publish information and events. Trade eventswill be publicly published. If a participant is matched, then theparticipant will receive a trade report. Those orders that did notqualify for the size up auction will not receive a trade report.

Referring to FIG. 37, an exemplary view of orders in a dark order bookbefore a size up auction is shown. It is noted that this order book isnot transparent, so this view is for illustration only and is notintended to be a view for a participant. The orders include buy orders3710 and sell orders 3720. Each order has a size up indicator 3730 basedupon whether the participant is interested in a size up auction for thatorder. Each order also has an indication 3740 of whether the orderqualifies for the size up auction. In this exemplary embodiment, when anorder has a Y (indicating a “yes”), then the participant will receive anIOI message when a trigger is activated for a size up auction. Anabsolute limit 3750 shows a maximum price for that order.

In this example, the NBBO is calculated at $9.005 based on a hid priceof $9.00 with a bid size of 1,000 and an ask price of $9.01 with an asksize of 600. A participant may submit an IOI response order with avolume of 2000 shares at a maximum of $10.05, because the participant isnot certain of the NBBO at that time.

FIG. 38 illustrates a method for conducting a size up auction accordingto an exemplary embodiment. In step 3810, a participant is verified bythe matching engine, and the participant submits an order into the orderbook specifying whether the participant is interested in participatingin a size up auction. In step 3820, a size up auction is triggered, soan NBBO snap shot is taken. For example, the NBBO event execution priceassignment is $9.005. In step 3830, the matching engine filtersqualifying orders to send messages. In step 3840, a participationmessage (an IOI message) is transmitted to the qualified participants.The message includes symbol and execution price. In step 3850, theparticipant responds with a message (IOI response order) that includesvolume and absolute limit. In step 3860, matching logic is applied. Thematching logic may be based upon size up committed volume and thenbroker preference, market maker, and then size/time. In step 3870, atrade report is disseminated to the participants.

Private Equity Financial Interests

In accordance with an aspect, embodiments described herein relate tomethods, systems, products, platforms, computer readable instructions,and so on, useful for helping business entities accomplish activitiessuch as financing, issuing and trading financial interests, reporting,and other processes, which can have significant effects upon theviability of affected entities, and thus the holding and transfer ofwealth, with significant practical consequences for those involved.

Aspects and embodiments described herein relate to the creation,holding, transfer, financing and/or administration of financialinterests, business entities, growth and development, and so on, Aspectsof such creation, holding, offering, trading, transfer, and/oradministration may be subject to regulation by governmental and otheragencies. The platform may provide a venue for primary offerings andsecondary trading (e.g. auction, bulletin board).

Developments in the growth, funding, and development of businessentities, including seeking and matching of investors or experts withbusiness entities, and trading of related financial interests, havecreated opportunities for development in the ways in which such partiesand businesses are identified and served.

Accordingly, embodiments described herein may provide issuers, and/orprospective issuers, of financial instruments with the ability to offerand/or trade, and/or otherwise make various forms of financialinstruments available to market participants and intermediaries, usingvarious combinations of data visibility and access, order books, tradingbooks, alternative trading systems, exchanges and/or other marketplacesor networked venues, and/or various types and/or categories thereof(which may be referred to herein as networked venues), selectivelyand/or simultaneously; or to seek and/or acquire various forms offunding through various forms of debt and/or equity issues using suchelectronic services and venues, and/or types and/or categories ofvenues.

Auctions, such as Dutch auctions, and/or other mechanisms may beemployed in matching market participants buying and selling orders; orto otherwise make financial instruments available on various networkedvenues. Disclosure and other procedures associated with trading,listing, offering, and/or trading of financial instruments on networkedvenues may also be managed on a common platform throughout the lifecycle of the financial instruments.

An example of both a process and a corresponding market participantsystem 300 for making business referrals, providing informationservices, and facilitating and/or accomplishing other businessprocesses, including for example matching investors with issuers and/orother entities needing funding is shown in FIG. 22.

In the embodiment shown, investor(s) 904 can, by for example workingthrough market participant(s) 300, access financing, issuing, reporting,trading, information, and other business functions by accessing acomputer hardware portal 902, and suitably-configured graphical userinterfaces (GUIs), adapted to elicit input of data representing requiredand/or otherwise desired information, indicating the type(s) of servicesrequired and making any corresponding elections/options choices. Issuers906 and referral networks 908 may also access portal 902. The portal 902may also be referred to as an exempt market portal.

As suggested by entities 904, 300, 906, 908 access to the system may berestricted to or through various class(es) of users, including forexample any one or more of various type(s) of financial interest dealersor other market participants.

As shown in FIG. 22, examples of processes and services enabled and/orrendered otherwise more efficient by process(es) and system(s) accordingto embodiments described herein include matching, referral services 912;information services 914; committee review services 916; initialoffering assistance services 918; and secondary market trading supportservices 920. Examples of features of such services enabled byembodiments described herein are shown in FIG. 22.

The portal 902 and supporting web platform may support various businessobjectives, facilitate back-end processing, identify key user groups,and provide service offerings, interaction models between internal andexternal entities, information processing, data storage, disseminationand checkpoints for assessment, validation and appropriate approvals,among other features.

Illustrative examples of business objectives include (but are notlimited to) providing a computer hardware platform where companies canaccess expertise from industry professionals through a sponsorshipprogram (e.g. champion program), find investors to facilitate both thecapital raising process and access to secondary market trading utilizinga centralized platform, increase visibility of the company, its ideas,products and services to qualified members of the investing public viavarious mediums (video, documents, other), have controlled access toservices and information by providing tools to set reasonablerestrictions on types of investors, maximum/minimum amount of capital tobe raised, frequency of trading, leverage standardized documentation togain efficiency and save costs, communicate and share information withcurrent and future Investors via various social media channels (e-mailcampaigns, notifications or alerts, advertising space, others), and soon.

Illustrative examples of networking functionality include (hut are notlimited to) providing a network infrastructure where qualified investorscan access information about investment opportunities available throughthe portal 902, gain confidence and trust in investment opportunities asa result of oversight and governance through sponsorships and expertreview committees, buy or sell financial interests of qualifiedcompanies through portal 902 secondary market 920, use differentinvestment fund and trust structures to diversify risk, enablecommunication and social media interaction via public/private chat,posting-boards/forums, and other mediums between Investors and othermarket participants, and so on.

Illustrative examples of service functionality include (but are notlimited to) providing a service infrastructure for eligible marketparticipants 300 to expand access to and visibility ofdeals/companies/sectors in which market participants 300 participate,gain exposure to additional clients and investor community, leveragestandardized dealer forms to create efficiency and save costs (accountopening forms, Know Your Client (KYC), suitability reviews, others),visibility and opportunity to develop relationships and attract clientsfor other services provided by the market participants (underwriting,analyst coverage and research, others), facilitate sales in initialofferings or subsequent financing rounds, or participate in secondarytransactions on behalf of their investors, and so on.

Illustrative examples of referral and expert network functionalityinclude (but are not limited to) allowing experts to share knowledge,expertise and personal/professional network access with prospectivecompanies and investors, certification supports or recommendations forcompanies ready to move to next stage. Key partners include approvedIncubators, accelerators, hubs and other communities. Services providersinclude approved legal, marketing, consulting, accounting/tax advice,and license services on white label basis, and so on.

Some or all of the above-noted functionality and objectives may beachieved by the portal 902. The portal 902 may provide an accessible andintuitive web-based platform to connect current and new initiatives toreduce costs and maximize opportunities. The portal 902 may provide astreamlined and electronic on-boarding process by leveragingstandardized document formats. The portal 902 may provide applicationsthat enable choice and control over what services are available to whichparties. The portal 902 may provide integration with social networkingtools to support information sharing, generate interest andefficiencies, and facilitate networking between companies, investors904, experts 301 and market participants 300 (e.g. dealers, other marketparticipants). The portal 902 may provide a secondary trading facilityfor capital raising groups to access liquidity and easily enter/exitinvestments as required.

A illustrative example of the target audience of the portal 902 mayinclude: companies (e.g. companies with at least a certain amount ofmarket capitalization for primary issuance, companies with at least acertain amount of market capitalization and greater than a certainnumber shareholders for secondary trading, and so on), investors 904(e.g. qualified investors including angel investors, venture capitalistsand private equity firms), market participants 300 (e.g. members of theInvestment Industry Regulatory Organization of Canada, exempt marketdealers, other market participants), incubators and accelerators (e.g.established organizations that support start-ups and foster innovation),service providers (e.g. lawyers, accountants, tax advisors, consulting,marketing firms) and so on. These are illustrative examples only andother groups may be targeted.

An example of a process flow for companies may enable company onboardingwith committee reviews. To become a participant on the portal 902, acompany may confirm readiness and viability. The company may approachproviders of the portal 902 directly or indirectly through other marketparticipants (lawyers, dealers, experts, referral networks, others). Ifa company approaches providers of the portal 902 directly, they may besubject to one or more review committees (e.g. Initial Review Committee(IRC) and Advisory Review Committee (ARC)). It may be possible to skipthe IRC process depending on whether or not the referral was through acertified partner or a qualified champion (approved expert). Committeesmay be comprised of panels of experts 301 who will review all thematerial presented by the prospective company. To become a member of apanel, experts 301 may submit their own profile through the portal andbe subject to an approval and selection process based on a pre-definedset of criteria used to determine eligibility. One of the members of theIRC may have to agree to champion a company in order to proceed to theARC. A company has the ability to select a champion should there be morethan one that expresses interest. A company can choose to reject achampion. A company may approach providers of the portal 902 with apre-selected champion (subject to approval). When the championdetermines the company is ready, the company may proceed to submit allrequired documents and required information to the ARC for review. TheARC may evaluate the offering to confirm that the information containedin the proposal meets benchmark standards (they will also evaluate thatthe terms of the proposed structure and the quality of information meetsthe standards). Should a company not succeed through the ARC process, itmay be possible to re-apply after a certain amount of time has passed.

FIG. 25 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate the on boarding of acompany with a private equity facility. System 900 may provide aninterface with a complete company profile form. After receiving inputdata defining attributes of the company, system 900 may check to sec ifreceived input data completes company profile. If not, then system 900may display a validation error. If the received input data completescompany profile, then system 900 may display a terms of use foracceptance. If the terms of use are accepted, then system 900 enters thecompany and submits the input data for the company profile. The companymay also be entered by referral of a certified practitioner. The companyprofile is stored in data storage device. System 900 may generate anotification or electronic message with a link to a network resource forto activate company profile. When the company activates their companyprofile the company page may be available by system 900. The companysystem may connect with system 900 using network.

There may be a panel selection flow involving an IRC process. A memberof the IRC may be a champion for a company. A check is made to determinewhether an IRC member is a champion for a company. If not, then thecompany may be denied entry to the system 900 and system 900 maygenerate and transmit a notification or electronic message indicatingdenial, IF the IRC member is a champion for a company, then system maylist the IRC member as an interested champion on the company profile.System 900 may generate and transmit a notification or electronicmessage indicating the champion for approval by the company prior toadding the champion to the company profile. System 900 may generate andtransmit a notification or electronic message indicating approval by thecompany to the champion. The champion via a computing device may provideinput data as company attributes for the company profile, and mayprepare company for further review. System 900 checks for IRC approvalof the company and determines whether the company is ready for review byARC. If not, then the champion may continue to prepare company andprovide input data for company profile. If the company is ready forreview by ARC then system 900 updates company profile with IRC approvalstatus and transmits electronic data package regarding attributes of thecompany from company profile data to the ARC. System 900 provides aninterface displaying data package about company and starts the ARCprocess. System 900 checks for ARC approval. If not, then the company isdenied entry into system. If so, then system 900 updates ARC approvalstatus on company profile. The system 900 receives notification topublish the company page for review by other interested parties viaprovision of a user interface. System 900 generates and transmits anotification for company activation and company profile page. Theprofile page may include offerings and market participants 300. Acompany may also provide documents for ARC and system 900 may add theprovided documents to the company profile stored in the data storagedevice. System 900 may transmit notification of the company to marketparticipants 300 that may be interested in the company. In response to amarket participant processor 300 request, system 900 may provide aninterface for display company profile page to market participantprocessor 300. System 900 may confirm company profile contents andtransmit electronic messages regarding the profile to IRC and ARC, ordisplay profile data as part of an interface. Dealers are anillustrative and non-limiting example of market participants.

Another example process flow for companies may enable primary issuance.Once through the IRC and ARC, each approved company may be assigned aprofile page on the portal 902 which may contain a promotional video orpresentation uploaded by a portal 902 administrator based on approvedcontent, provide required and additional details and documents thatsupport their issuance, identify key personnel and other relevantinformation, track progress of capital raising on the portal 902 via ascale widget identifying confirmed/committed capital towards theirissuance, identify previous funding rounds, committed investors, andother information about the business and its management may also beposted for Investors to view. Certain sections (company description,offering and trading status) of the company profile page will beaccessible to the general public, while other sections (funding details,documents, other investors, etc.) may be subject to receiving permissiondepending on user's status (companies and dealers may be able to controlaccess). To raise capital, companies may execute standardizedsubscription agreements with investors 904. A company can choose its ownescrow agent, lawyer, others; alternatively, they can ask the portal 902for a referral where required. A company can restrict the availabilityof its offering to specified market participants or make it available toany qualified market participant. A company can limit and control(accept/reject) investment participation to some or all of the qualifiedinvestors; it can set selection criteria for how other portalparticipants are introduced to the company's opportunities as well (e.g.only notify by e-mail to specific investor types). Once a round ofcapital raising is complete, historical elements of financing rounds andinvestors involvement may be maintained for future reporting, both onthe portal 902 and within the issuer management system 900.

A further example process flow for companies may enable secondarytrading capabilities. The portal 902 may be configured with controllogic to support different methods of secondary trading. Twoillustrative example methods include bulletin board and crossingsession. Bulletin board trading may include provision of a subsystemhosted in an execution facility that may be configured to display allcurrent posts of buying or selling financial interests (submitted asIOI's) on the portal 902 posted by the market participant processor 300on behalf of their clients. Crossing session (e.g. trade book, auctionbook) trading may include provision of an automated matching subsystemhosted leveraging exchange and trading capabilities, as describedherein. The automated matching subsystem may be configured to accept anddisplay orders entered by the market participant processor 300 via anorder management application and use a simple auction process to executetrades.

At a high level, the bulletin board workflow is represented in thediagram shown in FIG. 23.

At a high level, the crossing session workflow is represented in thediagram shown in FIG. 24.

Bulletin board matching may be implemented using a bulletin boardmatching engine (e.g. specifically configured computer hardware).Updated information of the company (profile and supporting documents)may be made available on the portal 902 to support trading through theelectronic bulletin board. To participate in a trade, both sellers andbuyers may submit interest through their own market participantprocessor 300. Market participant processor 300 may be used herein torefer to computer hardware that may be used by various marketparticipants, or agents thereof. An example market participant processor300 is a dealer processor 300. To make an offer, a seller may submit anorder (with selling conditions including number of shares and price) viathe portal 902 to the seller's own market participant processor 300 forpotential matching opportunity. Market participant may post the order onthe portal 902 electronic bulletin board. Buyer may express interestusing the portal 902 to market participant processor 300. Once anagreement is reached and signed between the seller and buyer (viarespective market participant processors 300), the exchange of funds andshares may be completed by the market participant processor 300 via anescrow/transfer agent and the company. Transaction may be completed at aprice negotiated between seller and buyer. Market participants (e.g.dealers) may submit transaction details (price, volume, shareholdername, others) to the portal 302 via a standardized form (e.g. electronicform displayed via a GUI).

Crossing session matching (e.g. trading book, auction book) or othertrade matching may be implemented using a crossing session matchingengine (e.g. specifically configured computer hardware) or othermatching engine. Updated information of the company (profile andsupporting documents) may be made available. To participate in a trade,both sellers and buyers must submit interest through their own marketparticipant processor 300. Sellers and buyers may submit orders (numberof shares and price) to portal 902 for potential matching opportunity.Bid/ask quotes may be entered into an auction. Trade matching may beannounced and scheduled to take place at a set time (for example, onceevery third Friday). Prior to the trade matching taking place, animbalance-like message may be disseminated informing all involvedparticipants of the imbalance and/or interest participating in the tradematching (e.g. sent day before or on the day of an auction). Forexample, using a crossing session engine, the orders may be sent by theportal 902 to the crossing session engine for electronic matching at thescheduled match time. The crossing session engine may disseminatetransaction details (price, volume, shareholder name, others) to portal902 who will provide to its participants.

An example process flow for investors 904 includes accredited investoron-boarding and profile management. Investors 904 may be able toinitiate the registration process through the portal by completingstandardized forms which may be sent to the assigned market participantfor review (the market participant may require the investor to executeother forms required of its clients). Once the market participantapproves the ‘profile’, the market participant may notify portal 902 forthe final approval which may create the investor's username and profilewithin the portal 902 (which may take up to two (2) days). Each investormay be assigned a private profile page as part of the registrationprocess which may contain private information, including biographicalinformation, financial details, investment profiles, areas of interest,confirmation of accredited investor status for verification by themarket participant processor 300. Personal information is only availableto market participants 300 or companies as permitted by investors 904.Investors 904 may have the ability to “follow” and electronicallyinteract with other registered investors via chat, postingboards/forums, likes/dislikes on companies, thumbs up/down on articles,star rankings of champions by investors 904, etc. Market participantprocessor 300 may have access to all of its client profiles. Generalpublic users (non-registered) may not be able to see investors 904profile pages on the portal (this capability is limited to permittedmarket participants 300 and companies). Investors 904 may have theability to browse through various company profiles as well as visibilityinto current offerings. Investors 904 (e.g. accredited, eligible,qualified) may receive access to special information about specificcompanies. Companies or market participants 300 may be granted access tosecure data rooms allowing them to share confidential information for alimited or unlimited period of time with each other and investors 904.Investor 904 may be able to engage any market participant processor 300who is interested in the deal and open an account (e.g. current marketparticipant processor 300 may not be involved in a transaction ofinterest) if he is not already a client. Alternatively, investors 904use their own market participant processor 300 to inquire about aparticular investment opportunity if the market participant (e.g.dealer) has become a participant.

FIG. 26 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate the on boarding of aninvestor 904 with a portal 902. System 900 may provide an interface withan investor profile form. After receiving input data defining attributesof the investor, system 900 may check to see if received input datacompletes investor profile. If not, then system 900 may display avalidation error. If the received input data completes investor profile,then system 900 may display a terms of use for acceptance. If the termsof use are accepted, then system 900 provides an interface for selectingmarket participants 300 (either assigned or selected) and system 900enters the investor and submits the input data for the investor profile,including market participant processor 300 information. The investorprofile is stored in data storage device. System 900 may generate anotification or electronic message to market participant processor 300indicating selection by investor 904. System 900 may generate anotification or electronic message with a link to a network resource toactivate investor profile. When the investor activates its investorprofile the investor page may be available by system 900. The investorsystem 904 may connect with system 900 using network. System 900 maygenerate a notification or electronic message to market participant(s)300 associated with investor 904. For example, the market participantprocessor 300 may log into system 900 via an interface. System 900 maycheck to see if an account is open by market participant processor 300for investor 904. If not, system 900 may generate a notification orelectronic message of rejection to investor 904 of selected marketparticipant processor 300. If so, then system 900 may update investorprofile with market participant client status. System 900 may generate anotification or electronic message to investor 904 for approval ofmarket participant client status, If system 900 receives approval frominvestor 904 then system 900 updates investor approval status ininvestor profile. System may generate final approval notifications fordisplay via interface and update final approval status in investorprofile. System 900 may activate the investor profile and may generate anotification or electronic message indicating activation of the profilepage for confirmation by the investor 904.

A further example process flow for investors 904 includes investing.When interested in making an investment in a deal, an investor 904 maycommunicate interest in the offering using a private message via theportal (email, or some other communication medium) which will beforwarded via market participant processor 300 (investor 904 may notcommunicate interest without an assignment to an agent, dealer or othermarket participant). Primary subscriptions and all initial company,investor, dealer, and market participant interactions will be capturedvia portal 902 for various reporting needs. When a transaction iscomplete, companies and market participants 300 may be required tosubmit transaction details (price, volume, shareholder name, others) toportal 902 via a standardized form/template, Specified transactiondetails will be posted online within the Investors private profile page(deal history and previous transactions). Specified transaction detailsmay be posted on the company profile page indicating who itsshareholders are, if appropriate (criteria for posting may beestablished), the price at which financial interests last traded, andothers. Unique investment and trust vehicles may be available givinginvestors diversification options to help minimize risk. By utilizinginvestment funds or trusts, an individual investor can make smaller, andmore widespread investments into multiple deals thereby providinggreater diversification. Investors will have escrow settlementarrangements facilitated through the company and their respective marketparticipants 300.

An example process flow for market participants 300 (e.g. dealer)including market participant onboarding and profile management. Toregister a market participant processor 300 on the portal 902,appropriate forms (profile) may be received and approved. Once accepted,a market participant processor 300 may provide or transmit (viatransmitter) a profile and other required materials to be displayed onthe portal after approval by a portal 902 administrator. Each marketparticipant processor 300 may receive a profile page on the portal withgeneral information and services it offers. The profile page may alsoinclude a history of previously completed deals, promotional videos orpresentations which potential companies and investors will be able toaccess, descriptions of additional resources including current deals,analyst coverage, areas and industries of interest, etc. Marketparticipants 300 may be responsible for know your client (KYC)verification, including confirming qualified investor status and varioussuitability reviews. Market participants may have an option to usecommon client account opening documentation provided by portal 902.Market participants may select the deals currently available on theportal 902 in which they are willing to participate (individual deals).An approved market participant may have access to all of its clientprofiles and may receive access to non-client investor profiles if aportal 902 investor 904 has granted permission.

FIG. 27 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate the on boarding of amarket participant processor 300 with a private equity facility. Forexample, system 900 may provide an interface with an market participantprofile form. After receiving input data defining attributes of themarket participant, system 900 may check to see if received input datacompletes market participant profile. If not, then the system 900 maydisplay a validation error. If the received input data completes marketparticipant profile, then the system 900 may display a terms of use foracceptance. If the terms of use are accepted, then the system 900 entersthe market participant and submits the input data for the marketparticipant profile, including market participant processor 300attributes. The market participant profile is stored in data storagedevice. System 900 may generate a notification or electronic messagewith a link to a network resource to activate market participantprofile. When the market participant activates its profile the marketparticipant page may be available by the system 900. The marketparticipant system 300 may connect with system 900 using network. System900 may generate a notification or electronic message regarding marketparticipant processor 300. System 900 may integrate with regulatorysystems to confirm market participant processor 300 profile data andperform market participant processor 300 registration check. System 900updates registration check status in profile associated with marketparticipant processor 300. System 900 confirms that the registrationcheck indicates that the market participant processor 300 is validatedor verified. The market participant processor 300 may log into system900 via an interface. System 900 may generate a notification orelectronic message for approval of market participant approval status.If market participant status is approved then system 900 updates marketparticipant approval status in profile. System 900 may generate anotification or electronic message to market participant processor 300regarding rejection if the market participant processor 300 is notapproved. System may generate final approval notifications for displayvia interface and update final approval status in market participantprofile. System 900 may activate the market participant profile and maygenerate a notification or electronic message indicating activation ofthe profile page for confirmation by the market participant 300.

An example process flow for experts 301 includes expert onboarding. Anexpert's 301 main purpose is to provide knowledge and a network tosupport early stage companies. Experts 301 may submit a profile usingthe portal 902 for approval by an administrator which may be based on aset of criteria covering education, expertise, sector, experience(including investment experience), accredited investor status andprevious history of participation on portal 902. Once approved, eachexpert may receive a profile page on the portal with general informationand services. The profile page may include specific informationincluding history and statistics of activity on the portal 902 orelsewhere, tracking of an expert's champion success rate, contactinformation, articles, experts' speeches, presentations (highlightingindustry, people, experience), and so on.

Experts may provide advice and expertise to companies in various areasincluding legal, marketing, accounting, technology, and human resources(including recruitment and compensation packages). Eligibility of anexpert to be a champion may be based on alignment of expertise andwillingness of the champion to make a commitment to the company.Champions may be obligated to provide time and advice to their companiesfrom the IRC process until the offering is completed or acceptance forsecondary trading is approved. Champions, participating during thecommittee review process, may not be obligated to provide advice afterthe company does its initial offering or is approved for secondarytrading, Champions may have an option to invest in the company, but maynot be obligated. If the relationship between the company and championfails, exit interviews may be conducted to determine the reasons and ifany subsequent action is required (e.g., expert status review, futurecompany eligibility, others).

FIG. 28 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate the on boarding of anexpert 301 with a portal 902. System 900 may provide an interface withan expert profile form. After receiving input data defining attributesof the expert, system 900 may check to see if received input datacompletes expert profile. If not, then system 900 may display avalidation error. If the received input data completes expert profile,then system 900 may display a terms of use for acceptance. If the termsof use are accepted, then system 900 enters the expert and submits theinput data for the expert profile, including expert 301 attributes. Theexpert profile is stored in data storage device. System 900 may generatea notification or electronic message with a link to a network resourceto activate expert profile. When the expert activates the expert'smarket participant profile the market participant page may be availableby system 900. The expert system 301 may connect with system 900 usingnetwork. System 900 may generate a notification or electronic messageregarding expert 301. System 900 may integrate with systems to confirmexpert 301 profile data and expert 301 background cheek. System 900updates background check status in expert profile. System 900 confirmsthat the background check indicates that the expert is validated orverified. The expert 301 may log into system 900 via an interface.System 900 may generate a notification or electronic message forapproval of expert approval status. If expert status is approved thensystem 900 updates expert approval status in expert profile. System 900may generate a notification or electronic message to expert 301regarding rejection if the expert 301 is not approved. System maygenerate final approval notifications for display via interface andupdate final approval status in expert profile. System 900 may activatethe expert profile and may generate a notification or electronic messageindicating activation of the profile page for confirmation by the expert301.

FIG. 29 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate panel selection ofexperts 301 with a portal 902. System 900 may provide an interface withan list of eligible experts, and an interface for users to review andevaluate expert 301 expertise. System 900 receives selections of expertsfrom the listing of eligible experts. For each selected expert, system900 checks for a match to an IRC or ARC panel, if not then system 900moves to another expert 301. If there is a match, then system 900updates expert selection status in expert profile and generates andtransmits notification to the expert 301 regarding selection on a panel.System 900 checks whether the expert 301 approves selection on a panel.If not, then system 900 moves to another expert 301. If expert 301approves, then system 900 updates expert IRC or ARC, as applicable,status in the expert profile. System 900 provides notification to expert301 of updated status.

FIG. 30 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate offerings with aportal 902. An investor 301 may submit an interest in company directlyto system 900 or via a selected or assigned market participant processor300. System 900 updates pending company and investor statuses in thecorresponding profiles. System 900 generates and transmits anotification or electronic message to company system. System 900 checksto see if interested investor 904 would like to open an account withmarket participant processor 300. If no, then the request is notprocessed further. If so, then investor 904 opens an account with marketparticipant processor 300 and system 900 updates market participantclient status data for investor profile. System 900 provides aninformation interface for the company to market participant processor300 and checks if market participant processor 300 is willing toparticipate in the offering and investor 904 is interested and eligibleto participate in the offering. If not, then system 900 provides anothercompany opportunity for market participant processor 300 and investor904 to generate a suitable review. If the review is suitable and thereis a decision to invest, system 900 provides a notification to companyfor subscription agreement, or provides the subscription agreement tomarket participant processor 300 if already available and stored incompany profile. System 900 updates data storage device with receivedsubscription agreements (electronic copies). Market participantprocessor 300 provides the subscription agreement to investor forexecution, and system 900 stores an executed copy of the subscriptionagreement in data storage device. Company executes the subscriptionagreement and submits the subscription agreement and shares in escrow toagent. System 900 stores the executed copy of the subscription agreementin data storage device, Market participant processor 300 notifiesinvestor 904 of executed subscription agreement and shares and requestsfunds. Investor 904 transfers funds to market participant processor 300and market participant sends the funds to an escrow agent. The escrowagent receives both the shares and the funds, which are distributed tothe investor 904 and the company, electronically for example, orotherwise. Company receives the funds and transmits a notification tosystem 900. Market participant processor 300 and investor 904 receivesshares and transmits a notification to system 900. System 900 updatestransaction status of company in profile of company and investor. System900 adds transaction details to company page and investor page. A marketparticipant processor 300 may subscribe on behalf of an investor.Certified partners (e.g. incubators, accelerators) may not need toundergo review process.

FIG. 31 provides an overview of a system 900 workflow which may beutilized in its entirety or in part to facilitate trading through aportal 902. A seller or buyer 906 may submit an interest in companydirectly to system 900 or via a selected or assigned market participantprocessor 300. System 900 updates pending company and seller transactionstatus in the corresponding profiles. System 900 provides a reviewinterface for the seller to market participant processor 300 to seerelevant information and checks if market participant via processor 300(and indirectly an eligible investor 904 who is a client of the marketparticipant) is willing and eligible to participate in the trade. Ifnot, then system 900 provides another trading opportunity for marketparticipant processor 300 and investor 904 to review. If the review issuitable, system 900 receives an order from market participant processor300 and updates pending buyer order status on profile or marketparticipant processor 300 or investor 904. System 900 adds transactiondetails to company page and investor page. System 900 determines ifthere a market agreement between buyer and seller. If no, then the orderis displayed on a bulletin board or matched. If there is a marketagreement then system 900 checks for additional buyer and selleragreements. If so, then transaction moves to completion and system 900engages escrow or other designated agent. System 900 updates profilewith transaction details and adds transaction details to company pageand investor page. If there is no agreement between buyer and seller,then market participant processor 300 notifies seller for negotiation.Negotiation process may result in agreement between buyer and seller,otherwise negotiation may continue. Seller submits shares in escrow toagent. Investor 904 transfers funds to market participant processor 300and market participant sends the funds to an escrow or other designatedagent. The escrow or other designated agent receives both the shares andthe funds, which are distributed to the investor 904 and the seller,electronically for example, or otherwise. Company receives the funds andtransmits a notification to system 900. Market participant processor 300and investor 904 receives shares and transmits a notification to system900. System 900 updates transaction status of company in profiles ofcompany and investor. The agreement may be determined automaticallythrough matching process. If not matched, then the order may remain inthe book until the next auction.

An example process flow for referral networks 908 includes providingservices to companies and identification of companies ready to doofferings or have access to secondary market. To create a shorter reviewand issuance process for companies, a company may be able to skip theIRC processes as a result of a referral via a certified partner(including incubators, accelerators, hubs, and others who have beenreviewed and/or otherwise approved). By working with certified partners,there may be an effective quality standardization that could attractmore companies to the portal 902. Three illustrative example optionsinclude (1) provision of infrastructure (technology/software platform)to certified partners, which process and do initial offering whileleveraging the portal 902 to do secondary market trading; (2) creating aset of standards for certified partners to apply to companies who wantto do an initial offering on the portal 902 (for example, standards aremet while working with incubators) and reduces time to do offering or beadmitted for secondary trading because review time may be shortened, forexample; (3) sharing of information through disclosure of investors 904and company profiles on portal 902 to provide access to marketparticipants 300 and market participant's clients.

The portal 902 and components interacting therewith may be implementedusing one or more computing devices operable to access remote networkresources. The computing devices may be the same or different types ofdevices. The computing device may be implemented using one or moreprocessors and one or more data storage devices configured withdatabase(s) or file system(s), or using multiple devices or groups ofstorage devices distributed over a wide geographic area and connectedvia a network (which may be referred to as “cloud computing”).

The portal 902 may reside on one or more networked computing devices,such as a personal computer, workstation, server, portable computer,mobile device, personal digital assistant, laptop, tablet, smart phone,1/1/AP phone, an interactive television, video display terminals, gamingconsoles, electronic reading device, and portable electronic devices ora combination of these.

The portal 902 may include any type of processor, such as, for example,any type of general-purpose microprocessor or microcontroller, a digitalsignal processing (DSP) processor, an integrated circuit, a fieldprogrammable gate array (FPGA), a reconfigurable processor, aprogrammable read-only memory (PROM), or any combination thereof. Theportal 902 may include any type of computer memory that is locatedeither internally or externally such as, for example, random-accessmemory (RAM), read-only memory (ROM), compact disc read-only memory(CDROM), electro-optical memory, magneto-optical memory, erasableprogrammable read-only memory (EPROM), and electrically-erasableprogrammable read-only memory (EEPROM), Ferroelectric RAM (FRAM) or thelike.

The portal 902 may include one or more input devices, such as akeyboard, mouse, camera, touch screen and a microphone, and may alsoinclude one or more output devices such as a display screen and aspeaker. The portal 902 has network interfaces in order to enablecommunication between system 900 components, to access and connect tonetwork resources, to serve an application and other applications, andto perform other computing applications by connecting to a network (ormultiple networks) capable of carrying data including the Internet,Ethernet, plain old telephone service (POTS) line, public switchtelephone network (PSTN), integrated services digital network (ISDN),digital subscriber line (DSL), coaxial cable, fiber optics, satellite,mobile, wireless (e.g. WiMAX), SS7 signaling network, fixed line, localarea network, wide area network, and others, including any combinationof these. There may be more portal 902 distributed over a geographicarea and connected via a network. The portal 902 is operable to registerand authenticate users (using a login, unique identifier, and passwordfor example) prior to providing access to applications, a local network,network resources, services, other networks and network securitydevices. The portal 902 may be different types of devices and may serveone user or multiple users.

The portal 902 may be configured with control logic for interfacing withmarket participant processor(s) 300, expert systems 301 and systems ofother market participants (e.g. issuers, investors) to receiveelectromagnetic signals defining data sets representing servicerequests, company data, proposed order requests to execute transactionsin one or more financial interests, and so on. The portal 902 isconfigured with control logic to process the service requests, companydata, proposed order requests to execute transactions in one or morefinancial interests, and so on.

The portal 902 connects with or integrates a persistent data store (e.g.data storage device) for storing the service requests, company data,proposed order requests to execute transactions in one or more financialinterests, along with attributes and parameters relating thereto, asdescribed herein.

The portal 902 is configured to integrate and connect with theinformation services and referrals utilities 914, 912 to exchangeelectromagnetic signals defining data sets representing service requestsand responses thereto.

The information services and referrals utilities 914, 912 may beconfigured to provide standardized legal documentation and standardizedforms to facilitate process simplification. Examples includenon-disclosure agreements, secure data room access agreements,shareholder agreements, escrow arrangements, and so on.

The information services and referrals utilities 914, 912 may beconfigured to facilitate market participant account opening and companydisclosure documents. This may involve the provisions of common forms tocreating efficiencies for market participants 300. Examples include knowyour client suitability reviews, client account opening forms, andaccredited investor verification forms. This may also involveestablishing basic disclosure requirements for an initial offering or toqualify for secondary trading.

The information services and referrals utilities 914, 912 may beconfigured to provide analyst services. This may involve providingaccess to analyst coverage and reports which may include overview of acompany's product, market and competitive analysis, sales and revenueforecasts, management profiles, discounted cash flow analysis, summaryof prior financings, and risk analysis.

The information services and referrals utilities 914, 912 may beconfigured to provide professional services. This may involve providingreferrals to trained and experienced experts in matters related toportal 902 including primary issuance and transactions, variousconsulting/professional services including, tax, accounting, legal,marketing, human resources, consulting services, and so on.

The information services and referrals utilities 914, 912 may beconfigured to provide education services. This may involve providinginformation regarding portal 902, services, associated risks, the roleof market participants 300, general Q&A/FAQ information, market sizing,deal history and success metrics. This may also involve posting articlesand white papers on various companies, products, sectors, investmenttopics, and posting webinars on various investment topics.

The portal 902 may also provide an electronic secure data room. Theelectronic secure data room offer a web based platform supportingcontrolled and secure document information disclosure and access. Theelectronic secure data room may allow for uploading and sharing ofprivate information to authorized market participants via fine-grainedrestricted and controlled account entitlements and permissions (such ashistorical financial statements, forecasts and projections, otherconfidential documents). The electronic secure data room may provideproper authentication for accessing the secure area and information willbe required; service could be managed by the company directly, or by anadministrator. All documents may encrypted, watermarked, logged and canbe password-protected; optionally, documents can be forced to remain ona secure server (i.e., not downloadable), and general access can be setto expire after a certain period of time.

The portal 902 may also provide market data for secondary market tradingvia the secondary trading utility 920. The portal 902 may have thecapability to disseminate market data for display as required on theportal 902 for investor 904 or other market participant use, or throughan ITCH-like protocol making information available to market datavendors (i.e. Bloomberg, Thomson Reuters, others). Relevant investmentor trading information may be published to facilitate disclosure ofinvestor and trading information (either through IOIs or auction bookorders) including high level topic summaries, executed trades/dealsbetween investors 904. Relevant post-trade historical information may bedisplayed on the company's main page including past transaction data,historical pricing and hid and ask data.

The portal 902 may also provide a reporting facility. Periodic reportsmay be generated to provide insight into overall activity on portal 902.Customized reports may be created tailored to each group of marketparticipants i.e. investors, companies, dealers, experts, others.

The portal 902 may also provide social media and networkingfunctionality. The Portal 902 may utilize social media tools to identifyand share investment opportunities, performance/selection history ofmarket participants, and identification of experts (e.g., rankingchampions by investors). The portal 902 may create social/educationalevents or annual conferences relevant to the industry to facilitatenetworking. The portal 902 may create chat rooms or forums allowingmarket participants to interact with other market participant, andoperators if needed. The portal 902 may provide e-mail distributionservices allowing: investors to stay current on new deals within theirarea of interest. Portal 902 could provide updates on deals on afrequent basis, market participant or operators can reach out toinvestors to notify targeted groups of individuals of a new and pendingtransactions; and portal 902 could notify about new companies or dealsand other metrics of interest (including number of pending deals, newfeatures and functions, others). The portal 902 may provide a ranking ofservices (rating of services by investors, companies, dealers, marketparticipants, others). The portal 902 may provide an “ask the expert”service by creating a specialized information service to allow marketparticipants to interact in near real time with knowledge centers.

Among the many advantages offered by embodiments described herein areimprovements in communications and funding or trading possibilitiesoffered by investor and issuer matching (sub)system/(sub)process 926. Inthe embodiment shown in FIG. 22, (sub)system/(sub)process 9276 enablesboth privately- and publicly-traded companies to access a variety ofservices and platforms related to listing, funding, and financialinterest offerings.

The service utilities include referral service utility 912, informationservices utility 914, committee review utility 916, initial offeringutility 918, and secondary trading utility 920.

Referral service utility 912 may be implemented using one or morecomputing devices operable to access remote network resources. Thecomputing devices may be the same or different types of devices. Thecomputing device may be implemented using one or more processors and oneor more data storage devices configured with database(s) or filesystem(s), or using multiple devices or groups of storage devicesdistributed over a wide geographic area and connected via a network. Thereferral service utility 912 may provide and enable a variety ofreferral services, examples of which are described herein. For example,referral services may include analyst services, tax services, legalservices, advisory services, consulting services, market participant(e.g. dealer) opening document services, data and information services,approved partner services, and so on.

The information services utility 914 may be implemented using one ormore computing devices operable to access remote network resources. Thecomputing devices may be the same or different types of devices. Thecomputing device may be implemented using one or more processors and oneor more data storage devices configured with database(s) or filesystem(s), or using multiple devices or groups of storage devicesdistributed over a wide geographic area and connected via a network. Theinformation services utility 914 may provide and enable a variety ofinformation services, examples of which are described herein. Forexample, information services may include investor education services,white paper and article services, social media and chat services, askthe expert services, standardized document services, and so on.

The information services utility 914 may be implemented using one ormore computing devices operable to access remote network resources. Thecomputing devices may be the same or different types of devices. Thecomputing device may be implemented using one or more processors and oneor more data storage devices configured with database(s) or filesystem(s), or using multiple devices or groups of storage devicesdistributed over a wide geographic area and connected via a network. Theinformation services utility 914 may provide and enable a variety ofinformation services, examples of which are described herein. Forexample, information services may include investor education services,white paper and article services, social media and chat services, askthe expert services, standardized document services, and so on.

Investor and issuer matching utility 926 may implement matching servicesfor committee review utility 916, initial offering utility 918,secondary trading utility 920, and other components of system 900.Referral networks 908 and data vendor and websites may integrate withcommittee review utility 916, initial offering utility 918, secondarytrading utility 920 to exchange electromagnetic signals defining datasets representing service and data requests and responses thereto.Investment vehicle systems 922 and sponsored systems 924 may integratewith committee review utility 916, initial offering utility 918,secondary trading utility 920 to exchange electromagnetic signalsdefining data sets representing service and data requests and responsesthereto. The sponsored systems 924 may provide services and data relatedto gate keeping and market participant screening.

The committee review utility 916 may be implemented using one or morecomputing devices operable to access remote network resources. Thecomputing devices may be the same or different types of devices. Thecomputing device may be implemented using one or more processors and oneor more data storage devices configured with database(s) or filesystem(s), or using multiple devices or groups of storage devicesdistributed over a wide geographic area and connected via a network. Thecommittee review utility 916 may provide and enable a variety ofcommittee review services, examples of which are described herein. Forexample, committee review services may include issuer profile services,IRC services, sponsorship services, ARC services, secure data room(tiered) services, and so on. The initial offering utility 918 may beimplemented using one or more computing devices operable to accessremote network resources. The computing devices may be the same ordifferent types of devices. The computing device may be implementedusing one or more processors and one or more data storage devicesconfigured with database(s) or file system(s), or using multiple devicesor groups of storage devices distributed over a wide geographic area andconnected via a network. The initial offering utility 918 may provideand enable a variety of initial offering services, examples of which aredescribed herein. For example, initial offering services may includeinvestor profile services, issuer disclosure services, marketparticipant (e.g. dealer, investor) profile services, expert profileservices, referral network profile services, secure data room (tiered)services, and so on.

The secondary trading utility 920 may be implemented using one or morecomputing devices operable to access remote network resources. Thecomputing devices may be the same or different types of devices. Thecomputing device may be implemented using one or more processors and oneor more data storage devices configured with database(s) or filesystem(s), or using multiple devices or groups of storage devicesdistributed over a wide geographic area and connected via a network. Thesecondary trading utility 920 may provide and enable a variety ofsecondary trading services, examples of which are described herein. Forexample, secondary trading may include investor profile services, issuerdisclosure services, market participant (e.g. dealer, investor) profileservices, investor interest services, market data services, reportingfacility services, secure data room (tiered) services, and so on.

Volume Allocation Router

A volume allocation router (VAR) algorithm can identify a matchingpriority of various constituent types and is aimed at ensuring a fairallocation of trading opportunity across all market participants. Thealgorithm can mitigate quote crowding, which typically results in longterm investors missing out on quality trading opportunities. Theimplementation of the VAR algorithm allows for a robust market makingprogram designed to provide stable liquidity and quality price discoveryby matching priorities that favor the investor over those who leveragesped and technology as an advantage. Provision of a higher priority inan order queue can increase the likelihood of fills and reduce thenumber of times the investor has to cross the spread to trade.

When an order is received by a trading engine from a participant, arules engine processor determines how much each participant is to beallocated and updates in real-time for each order. Matching priority canbe implemented by the rules engine processor associated with the tradingengine of the exchange. The trading engine can then pair the buy ordersand sell orders accordingly. Referring to the trading engine 3204 inFIG. 32 and the trading engine 3630 in FIG. 36, the trading engine caninclude a module, server, or other component that performs as a rulesengine processor.

In an exemplary embodiment, matching priority may proceed as shown inFIG. 39. In price level 1, best price always has priority. In sub level1.1, within a price level, broker preferencing or market maker haspriority based on top level participant allocation rules. In sub level1.1.2, if multiple broker preferencing orders exist, orders will beprioritized according to Non SME (i.e., long term investors). In sublevel 1.1.3, if multiple broker preferencing orders exist and multipleNon SME orders exist for this broker, orders will be prioritizedaccording to time. In sub level 1.2, after broker preferencing orders,remaining orders will be prioritized according to Non SME. In sub level1.2.1, if multiple Non SME orders exist, they will be prioritizedaccording to time. In sub level 1.3, remaining orders will beprioritized according to time. In price level 2 . . . N (up to limitprice of order), if the order trading has remaining quantity after pricelevel 2, the system will then attempt to match with the next price levelup to the limit price of the order using the steps outlined above.

In an exemplary embodiment, a queue priority owner is to be allocated85% of the traded volume, and a designated market maker is to beallocated 15% of the traded volume. It is intended that thesepercentages are merely exemplary. Although the exemplary embodimentrecites the use of a hybrid order book, the VAR can be applied to anyexchange. In this example, a hybrid order book has the following orders:

OID Bid Vol. Bid $ Ask $ Ask Vol. OID O1 — 400 10.00 10.11 100 O5 O2 LTI400 10.00 10.14 200 O6 O3 DMM 400 10.00 10.35 400 DMM O7 O4 ABC 20010.00

A sell order is received by ABC to sell 1,500 shares of MKT. Accordingto the matching priority above, it is first determined whether there isa best price. All orders are the same price (e.g., $10.00) in thisexample, so the priority moves to the next level.

Using broker preferencing, broker ABC's order O4 trades 200 shares at$10.00. Broker ABC is the same entity as the sell order participant, soa like dealer trades ahead of everyone (except based on price). As aresult, there is an over allocation to the queue priority owner, who has100%, so the designated market maker (DMM) has an opportunity to tradenext.

The designated market maker's order O3 trades 400 shares at $10.00 dueto volume allocation router. 400 shares is 66% of the volume, and thedesignated market maker is allocated for 15%. As a result, thedesignated market maker is now over allocated, so the long term investor(LTI) has an opportunity to trade next.

The long term investor's order O2 trades 400 shares at $10.00. Thedesignated market maker's allocation is now 40%, and the queue priorityowner's allocation is 60%. The designated market maker is still overallocated.

Order O1 trades 400 shares at 10.00 due to the time the order wasreceived by the hook. The order is now fully filled. The designatedmarket maker is over allocated at 29% and the queue priority owner'sallocation is 71%.

Further aspects, features, and advantages of the embodiments describedherein are provided in U.S. Provisional Application No. 61/735,836, U.S.Provisional Application No. 61/735,846, U.S. Provisional Application No.61/838,696, U.S. Provisional Application No. 61/838,763, and U.S.Provisional Application No. 61/894,608 which are hereby incorporatedherein by reference.

Various aspects, embodiments may be configured for processing of datarelated to transactions and other processes associated with any of avery wide variety of financial interests, including for example stocks,bonds, and all other forms of debt and/or equity instruments, optionsand other derivatives, currency exchange, and/or a wide variety ofcommodities, including goods, services, and energy.

While certain feature(s) and/or function(s) of systems, methods andcomputer readable instructions for automated trading of financialinstruments have been described, still other aspects not explicitlydescribed herein may be included as well in a wide variety of furtherembodiments. This disclosure is meant to be exemplary in nature of thedescribed functionalities and not to be considered limiting.

1.-20. (canceled)
 21. A method implemented at a message processinggateway server system, the method comprising: receiving, by the messageprocessing gateway server system, a plurality of messages from aplurality of participant computers each associated with a correspondingparticipant, each message of the plurality of messages comprising atrade order instruction relating to an identified instrument forexecution by a trading engine processor; selectively applying, by themessage processing gateway server system, to at least some messages alatency based on at least one characteristic of the trade order selectedfrom the set of: order type, instrument type, instruction type,participant type, participant identifier, order attribute, order marker,instrument price, historical order to execution ratio associated withthe corresponding participant, physical proximity of the participantcomputer to the trading engine processor, or type of trading strategy;and transmitting, by the message processing gateway server system, themessage to the trading engine processor for execution, wherein when thelatency is applied, the message is held in a queue for a delay periodcomprising a non-zero time value up to 200 milliseconds prior totransmitting the message to the trading engine processor for execution.22. The method of claim 21, wherein the at least one characteristiccomprises either historical order to execution ratio associated with thecorresponding participant, or physical proximity of the participantcomputer to the trading engine processor.
 23. The method of claim 21,wherein the at least one characteristic comprises either order type ortrading strategy.
 24. The method of claim 21, wherein the range of timevalues is from 3 milliseconds to 200 milliseconds.
 25. The method ofclaim 21, wherein the range of time values is from 5 milliseconds to 9milliseconds.
 26. The method of claim 21, wherein determining whetherthe message was received from a participant associated with a firstgroup of participants or a participant associated with a second group ofparticipants comprises checking a record in a database to determinewhether the participant identifier is associated with the first group orthe second group.
 27. The method of claim 21, wherein the queue ismaintained at the message processing gateway system.
 28. The method ofclaim 21, wherein the delay period is greater than a system delay timeapplied to messages due to routing of the plurality of messages within anetwork to the message processing gateway server system.
 29. The methodof claim 21, wherein the second group of participants comprisesparticipants identified as long term investors and the first group ofparticipants comprises participants not identified as long terminvestors.
 30. A system, comprising: a message processing gateway serversystem comprising a processor configured to: receive a plurality ofmessages from a plurality of participant computers each associated witha corresponding participant, each message of the plurality of messagescomprising a trade order instruction relating to an identifiedinstrument for execution by a trading engine processor; selectivelyapply to at least some messages a latency based on at least onecharacteristic of the trade order selected from the set of: order type,instrument type, instruction type, participant type, order attribute,order marker, instrument price, historical order to execution ratioassociated with the corresponding participant, physical proximity of theparticipant computer to the trading engine processor, or type of tradingstrategy; and transmit the message to the trading engine processor forexecution, wherein when the latency is applied, the message is held in aqueue for a delay period comprising a non-zero time value up to 200milliseconds prior to transmitting the message to the trading engineprocessor for execution.
 31. The system of claim 30, wherein the atleast one characteristic comprises either historical order to executionratio associated with the corresponding participant, or physicalproximity of the participant computer to the trading engine processor.32. The system of claim 30, wherein the at least one characteristiccomprises either order type or trading strategy.
 33. The system of claim30, wherein the range of time values is from 3 milliseconds to 200milliseconds.
 34. The system of claim 30, wherein the range of timevalues is from 5 milliseconds to 9 milliseconds.
 35. The system of claim30, wherein the processor is configured to determine whether the messagewas received from a participant associated with a first group ofparticipants or a participant associated with a second group ofparticipants by checking a record in a database to determine whether theparticipant identifier is associated with the first group or the secondgroup.
 36. The system of claim 30, wherein the queue is maintained atthe message processing gateway system.
 37. The system of claim 30,wherein the delay period is greater than a system delay time applied tomessages due to routing of the plurality of messages within a network tothe message processing gateway system.
 38. The system of claim 30,wherein the second group of participants comprises participantsidentified as long term investors and the first group of participantscomprises participants not identified as long term investors.
 39. Anon-transitory computer-readable medium storing code which, whenexecuted by a processor of a message processing gateway server system,causes the system to implement the method of: receiving a plurality ofmessages from a plurality of participant computers each associated witha corresponding participant, each message of the plurality of messagescomprising a trade order instruction relating to an identifiedinstrument for execution by a trading engine processor; selectivelyapplying to at least some messages a latency based on at least onecharacteristic of the trade order selected from the set of: order type,instrument type, instruction type, participant type, participantidentifier, order attribute, order marker, instrument price, historicalorder to execution ratio associated with the corresponding participant,physical proximity of the participant computer to the trading engineprocessor, or type of trading strategy; and transmitting the message tothe trading engine processor for execution, wherein when the latency isapplied, the message is held in a queue for a delay period comprising anon-zero time value up to 200 milliseconds prior to transmitting themessage to the trading engine processor for execution.